Deconstructing the Decline in Inequality in Latin America

Inequality in Latin America unambiguously declined in the 2000s. The Gini coefficient fell in 16 of the 17 countries where there are comparable data, and the change was statistically significant for all of them. Existing studies point to two main explanations for the decline in inequality: a reduction in hourly labor income inequality, and more robust and progressive government transfers. Available evidence suggests that it is the skill premium -- or, more precisely, the returns to primary, secondary, and tertiary education vs. no schooling or incomplete primary schooling -- that drives the decline in hourly labor income inequality. The causes behind the decline in returns to schooling, however, have not been unambiguously established. Some studies find that returns fell because of an increase in the supply of workers with more educational attainment; others, because of a shift in demand away from skilled labor.

Bibliographic Details

Main Authors:	Ortiz-Juarez, Eduardo, Lustig, Nora, Lopez-Calva, Luis F.
Language:	English en_US
Published:	World Bank, Washington, D.C 2013-07
Subjects:	ACCOUNTING, ACTIVE LABOR, ACTIVE LABOR MARKET, ACTIVE LABOR MARKET POLICIES, ANNUAL % CHANGE, AVERAGE CHANGE, BASIC EDUCATION, BIRTH RATES, CAPITAL ACCUMULATION, COLLEGE GRADUATES, CONCENTRATION COEFFICIENTS, COUNTERFACTUALS, DECLINING INEQUALITY, DEMAND-SIDE, DEMOCRACY, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DISTRIBUTIONAL CHANGES, DRIVERS, EARNING, ECONOMIC CONDITIONS, ECONOMIC GROWTH, ECONOMIC REVIEW, EDUCATIONAL ATTAINMENT, EDUCATIONAL LEVELS, ELASTICITY, EMPLOYMENT, EMPLOYMENT EFFECTS, EQUALIZING EFFECT, EXPLANATORY VARIABLES, FORMAL EDUCATION, GINI COEFFICIENT, GLOBAL DEVELOPMENT, GROWTH COMPONENT, GROWTH SPELLS, HOUSEHOLD INCOME, HOUSEHOLD SURVEYS, HUMAN CAPITAL, HUMAN DEVELOPMENT, HUMAN RESOURCES, INCIDENCE OF POVERTY, INCOME, INCOME DISTRIBUTION, INCOME INEQUALITY, INCOME REDISTRIBUTION, INCOME SOURCE, INCOMES, INEQUALITY, INEQUALITY CHANGES, INEQUALITY MEASURE, INEQUALITY TRENDS, INVERSE RELATIONSHIP, LABOR INCOME, LABOR MARKET, LABOR MARKET INSTITUTIONS, LABOR MARKET POLICIES, LABOR RELATIONS, LABOR SUPPLY, LEVELS OF EDUCATION, MEAN INCOME, MIGRANT, MINIMUM WAGE, MINIMUM WAGES, OPPORTUNITY COST, PENSIONS, PER CAPITA INCOME, PER CAPITA INCOMES, POLICY CHANGES, POLICY DISCUSSIONS, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLITICAL ECONOMY, POOR HOUSEHOLDS, POVERTY LINE, POVERTY MEASURES, POVERTY REDUCTION, POWER PARITY, PRIMARY EDUCATION, PRIMARY SCHOOL, PRIMARY SCHOOLING, PRIVATE TRANSFERS, PRODUCTION FUNCTION, PROGRAMS, PROGRESS, PUBLIC EXPENDITURE, PUBLIC SPENDING, PUBLIC TRANSFERS, PURCHASING POWER, PURCHASING POWER PARITY, QUALITY OF EDUCATION, REAL EXCHANGE RATE, REAL WAGES, REDISTRIBUTIVE POLICIES, REDUCING POVERTY, REGIONAL AVERAGES, RELATIVE CONTRIBUTIONS, RELATIVE DEMAND, RELATIVE DISTRIBUTION, RELATIVE SUPPLY, RELATIVE WAGES, REMITTANCE, REMITTANCES, RENTS, RESIDUAL TERM, RESPECT, RURAL AREAS, SCHOOL ENROLMENT, SECONDARY EDUCATION, SECONDARY SCHOOL, SECONDARY SCHOOLING, SKILL GROUPS, SKILL PREMIUM, SKILL PREMIUMS, SKILLED LABOR, SKILLED WORKERS, SOCIAL POLICY, TERTIARY EDUCATION, UNEMPLOYMENT, UNEMPLOYMENT RATES, UNSKILLED LABOR, UNSKILLED WORKERS, URBAN AREAS, WAGE DIFFERENTIALS, WAGE INEQUALITY, WAGE LEVELS, WAGE PREMIUM, government transfers,
Online Access:	http://documents.worldbank.org/curated/en/2013/07/18060343/deconstructing-decline-inequality-latin-america https://hdl.handle.net/10986/15915
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