LAC Semiannual Report October 2014: Inequality in a Lower Growth Latin America

Torre, Augusto de la; Yeyati, Eduardo Levy; Beylis, Guillermo; Didier, Tatiana; Castelan, Carlos Rodriguez; Schmukler, Sergio L.

doi:10.1596/978-1-4648-0429-8

Cited by 8 publications

(7 citation statements)

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“…This study also provides evidence that, although caused mainly by the impact of the global financial crisis especially in Central America and Mexico, the stagnation in income inequality in Latin America could become long term given that the regional and global economies are projected to experience slowing growth (De la Torre et al, , 2014. 17 This may affect the reduction of inequality through two channels: (1) labor markets may slow job creation and wage increases among the less highly skilled, which represents much of the region's population, and (2) the ability of governments to maintain or raise spending on public transfers and social pensions to redistribute income may become more limited.…”

Section: Resultsmentioning

confidence: 79%

“…Several studies have shown evidence of a steady decline in income inequality in Latin America over the first decade of the 2000s (De la Torre et al, 2014;Gasparini et al, 2009;L opez-Calva and Lustig, 2010;Lustig et al, 2013;World Bank, 2011a). This result is robust to the choice of time period, welfare aggregate, inequality measure and data source.…”

Section: Introductionmentioning

confidence: 99%

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Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Cord

Cabanillas

Lucchetti

et al. 2016

Review Development Economics

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Between 2003 and 2010, Latin America experienced a solid record of economic growth, coupled with a notable reduction in income inequality. The regional Gini coefficient fell from 0.556 to 0.521 and declined in all 15 out of 17 countries in which frequent data are available. However, previous studies have warned about problems in the sustainability of the decline in income inequality and this study presents evidence of stagnation on this front between 2010 and 2013. The results are robust to various measures of income inequality, but differ across the region. While largely attributable to the recovery from the global financial crisis in Mexico and some countries in Central America, the results are also supported by the demonstrated slowdown in inequality reduction in other countries, including Brazil, Ecuador and Bolivia.

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Section: Resultsmentioning

confidence: 79%

Section: Introductionmentioning

confidence: 99%

Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Cord

Cabanillas

Lucchetti

et al. 2016

Review Development Economics

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“…Studies have generally concluded that income inequality in Mexico has decreased in recent years throughout the entire income distribution. In particular, estimations of the Gini Index using household‐survey data show that inequality has been reduced (see De la Torre, Levy‐Yeyati, Beylis, Didier, and Schmukler ) . These estimations do not take into account the misrepresentation of top earners in household surveys.…”

Section: Discussionmentioning

confidence: 99%

Estimating Top Income Shares Without Tax Return Data: Mexico Since the 1990s

Campos-Vázquez

Chavez

Esquivel

2018

Latin American Policy

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This study estimates the income of individuals in the top part of the income distribution in Mexico since 1992. Mexico is the only Organisation for Economic Co‐operation and Development country that does not report publicly income from fiscal sources. To circumvent this problem, we use income information from household surveys but adjust the misrepresentation of top earners using national accounts data. We then estimate incomes of the very rich using interpolations based on a Pareto distribution. Once we correct for the misrepresentation of top earners in the survey, we find that the income share of the top decile has increased in the last two decades. Our findings contradict the conclusion that is usually obtained solely from household survey information. We also find that the income share of top‐1% earners in Mexico is close to 25%, making Mexico one of the countries where the rich take the largest share of total income. Moreover, we find that inequality among the rich in Mexico is larger than in most countries where information is available.

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“…This argument shapes the World Bank's proposals for reducing income inequality in Latin America, where they advocate education reform but make no reference to improving the protection of workers' rights. 26 Similarly, President Obama's new "middle-class economics" proposes to reduce income inequality through increased education spending, and other measures, without attention to protecting the rights of American workers. 27 Although increased education spending is likely part of the solution to income inequality, increasing productivity without attention to workers' rights threatens to increase profits without increasing wages.…”

Section: Neoclassical Models and Political Economymentioning

confidence: 99%

Power over Profits

Dean

2015

Politics & Society

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Contemporary political economy debates tend to assume that an increase in productivity automatically leads to an equal increase in workers' wages. This assumption shapes the way that many scholars think about economic globalization, as well as domestic policy reforms. This assumption is particularly widespread in the field of international political economy, where it is implicitly incorporated through the use of neoclassical economic models. Rather than explore the distributional struggle between capital and labor, these models use the assumption of full employment to predict that policies that increases worker productivity automatically leads to an equal increase in workers' wages. In contrast, this article argues that the degree to which wages increase along with productivity depends on the domestic institutions that protect workers' rights to act collectively. This article tests the relationship between worker productivity and wages by analyzing data from twenty-eight manufacturing industries, in 117 countries, from 1986 to 2002. The results demonstrate that the degree to which an increase in worker productivity leads to an increase in wages depends on a country's level of protection for labor rights.

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LAC Semiannual Report October 2014: Inequality in a Lower Growth Latin America

Cited by 8 publications

References 0 publications

Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Estimating Top Income Shares Without Tax Return Data: Mexico Since the 1990s

Power over Profits

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