Understanding the Dynamics of Labor Income Inequality in Latin America

Rodriguez Castelan, Carlos ; Lopez-Calva, Luis F. ; Lustig, Nora ; Valderrama, Daniel

World Bank, Washington, DC

关键词: inequality;    labor income;    education premium;    labor market;    experience premium;   

DOI  :  10.1596/1813-9450-7795
RP-ID  :  WPS7795

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Since the early 2000s, after a longperiod of wide and persistent gaps, Latin America hasexperienced a steady decline in income inequality. Thispaper presents evidence of a trend reversal in labor incomeinequality, which is considered the main factor behind sucha decline in income inequality across the region. Theanalysis shows that, while labor income inequality increasedduring the 1990s, with heterogeneous experiences acrosscountries, it fell in a synchronized way across countriesbeginning in the early 2000s. This systematic decline wassupported by an expansion in real hourly earnings among thebottom of the wage distribution and, to a lesser extent, themiddle part of the earnings distribution, thus reducingupper and lower tail inequality. This trend reversal isexplained by a lower dispersion of earnings among workerswith observable different attributes and by a much lessextensive dispersion of residual labor inequality. Regardingthe earnings differentials among workers with observabledifferent attributes, the analysis concludes that thedecline in labor inequality in Latin America has beenclosely associated with a reduction in the college/primaryeducation premium and in the urban-rural earnings gap,coupled with a steady drop in the high school/primaryeducation premium, which accelerated markedly since the2000s, as well as a reduction in the experience premiumacross all age groups.