Eduardo Ortiz-Juarez

Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico

Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country.

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.

The decline in inequality in Latin America: How much, since when and why

Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina—and to a lesser extent in Brazil--, from more active labor market policies as well.

A Long-Term Perspective on Inequality and Human Development in Latin America

Latin America has always been seen as a region with inherently high levels of inequality. After devoting his time and scientific talent to explore the new world in the early nineteenth century, Ale...

Inequality, Mobility and Middle Classes in Latin America

What is the link between middle class and income inequality? This chapter will assess the relationship between changes in income distribution and the growth of the middle class. Interest in the latter has peaked worldwide, as the rise of the global middle class is increasingly recognized as a key megatrend (Global Trends 2030, 2013). Zooming in on the concrete case of Latin America and the Caribbean, we know that, as economic activity has grown and poverty levels have fallen alongside economic growth, the middle class is on the rise. We also know that income inequality has fallen in the region. Within this context, following a discussion on the middle class and inequality and presenting some recent trends, this chapter asks how much of the expansion of the middle class in Latin America is explained by economic growth, and how much by the decline in income inequality.1

Living on the Edge

Abstract Social policy in Mexico has focused on identifying and supporting households in extreme poverty. Yet, the country has a significant number of households just above the poverty line who are not eligible, by definition, for antipoverty programmes and are at risk of falling into poverty in the event of adverse shocks without appropriate social safety nets. This study uses cross-section and longitudinal data to understand better the profile of those ‘vulnerable’ households, their risk exposure, and the extent to which they are covered by public transfers and insurance mechanisms. The analysis shows that until 2010 most social programmes, including the few with productive components, barely covered the vulnerable. The study calls for public policies to pay attention to the vulnerable and find a policy mix on the continuum between targeted interventions and universal insurance schemes to serve this income group.