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Decomposing the Recent Inequality Decline in Latin America

2013; Linguagem: Inglês

10.1596/1813-9450-6715

1813-9450

João Pedro Azevedo, Gabriela Inchaust, Viviane Sanfelice,

Economic theories and models

No AccessPolicy Research Working Papers2 Jan 2014Decomposing the Recent Inequality Decline in Latin AmericaAuthors/Editors: Joao Pedro Azevedo, Gabriela Inchaust, Viviane SanfeliceJoao Pedro Azevedo, Gabriela Inchaust, Viviane Sanfelicehttps://doi.org/10.1596/1813-9450-6715SectionsAboutPDF (0.6 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: Over the past decade, 12 of 14 Latin American countries have experienced a reduction in inequality. Based on a series of counterfactual simulations, the observed changes in inequality are decomposed in order to identify the main determinants of inequality. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates counterfactual distributions, so that the analysis can account for changes related to demographics, occupation, labor earnings and transfers, pensions, and other nonlabor income sources. The results show that for the majority of countries in the sample, the most important contributor to the observed decline in inequality has been the relatively strong growth in labor earnings at the bottom of the income distribution. In particular, most of the reduction in inequality can be attributed to an increase in earnings per hour for the bottom of the income distribution. The paper also contributes to the literature on inequality in Latin America by providing the Shapley-Shorrocks value of this decomposition. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByThe long term impact of Chilean policy reforms on savings and pensionsThe Journal of the Economics of Ageing, Vol.19The Human Capital Index 2020 Update22 June 2021Labor Market Experience and Falling Earnings Inequality in Brazil: 1995–2012The World Bank Economic Review, Vol.4025 March 2021Twenty Years of Wage Inequality in Latin AmericaWorld Bank Economic Review, Vol.35, No.116 February 2021Changes in Economic Inequality in Europe and Latin America in the First Decades of the Twenty-First Century14 November 2020'No country for old men'? The multiplier effects of pensions in Portuguese municipalitiesJournal of Pension Economics and Finance, Vol.19, No.219 December 2018The global significance of national inequality declineThird World Quarterly, Vol.41, No.128 September 2019Twenty Years of Wage Inequality in Latin America7 October 2019Have cash transfers succeeded in reaching the poor in Latin America and the Caribbean?Development Policy Review, Vol.37, No.S227 May 2019Poverty changes in Manaus: Legacy of a Brazilian free trade zone?Review of Development Economics, Vol.23, No.14 November 2018Unequal Family Lives, Vol.1226 July 2018The Role of Labor Supply in Wage Inequality Trends1 February 2018The rise and fall of income inequality in ChileLatin American Economic Review, Vol.26, No.113 February 2017The Distributional Impact of Fiscal Policy in Georgia5 September 2017The Inequality Story in Latin America and the Caribbean: Searching for an Explanation29 January 2017A SHAPLEY DECOMPOSITION OF MULTIDIMENSIONAL CHRONIC POVERTY IN ARGENTINABulletin of Economic Research, Vol.69, No.14 May 2016Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand FrameworkSSRN Electronic JournalSkill Premium, Labor Supply and Changes in the Structure of Wages in Latin AmericaSSRN Electronic JournalWhy did Poverty Decline in India? A Nonparametric Decomposition Exercise11 April 2016Sifting through the Data: Labor Markets in Haiti through a Turbulent Decade (2001–2012)9 March 2016Declining Wages for College-Educated Workers in Mexico: Are Younger or Older Cohorts Hurt the Most?9 March 2016Assessing the Impact of Social Grants on Inequality: A South African Case StudyUnpacking the MPI: A Decomposition Approach of Changes in Multidimensional Poverty Headcounts6 January 2016Is It Possible to Adjust 'With a Human Face'? Differences in Fiscal Consolidation Strategies between Hungary and IcelandComparative Economic Studies, Vol.57, No.41 December 2015Equidad en el financiamiento de campañas en América Latina y sus implicaciones para la competitividad electoral: una mirada a las elecciones en Centroamérica, 2010-2014Colombia Internacional, No.85Inequality, Mobility and Middle Classes in Latin AmericaOn the Determinants of Changes in Wage Inequality in BoliviaSSRN Electronic JournalFiscal Adjustment and Income Inequality: Sub-National Evidence from Brazil15 August 2014 View Published: December 2013 Copyright & Permissions Related RegionsLatin America & CaribbeanRelated TopicsSocial Protections and LaborPoverty ReductionPrivate Sector Development KeywordsINEQUALITYDECOMPOSITION Loading ...