Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis
Over the past decade (2003-12), Latin America has experienced strong income growth and a notable reduction in income inequality, with the region's Gini coefficient falling from 55.6 to 51.8. Previous studies have warned about the sustainabilit...
| Main Authors: | , , , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/12/23117484/inequality-stagnation-latin-america-aftermath-global-financial-crisis http://hdl.handle.net/10986/21141 |
| Summary: | Over the past decade (2003-12), Latin
America has experienced strong income growth and a notable
reduction in income inequality, with the region's Gini
coefficient falling from 55.6 to 51.8. Previous studies have
warned about the sustainability of such a decline, and this
paper presents evidence of stagnation in the pace of
reduction of income inequality in Latin America since 2010.
This phenomenon of stagnation is robust to different
measures of inequality and is largely attributable to the
impact of the Global Financial Crisis on Mexico and Central
America, where inequality rose after 2010 as labor income
recovered. Moreover, this paper finds evidence that much of
the continuation of inequality reduction after the crisis at
the country level has been due to negative or zero income
growth for households in the top of the income distribution,
and lower growth of the incomes of the poorest households.
The crisis also highlighted weaknesses in the region's
labor markets and the heavy reliance on public transfers to
redistribute, underscoring the vulnerability of the
region's recent social gains to global economic conditions. |
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