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Decomposing the Recent Inequality Decline in Latin America / Azevedo, Joao Pedro
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Azevedo, Joao Pedro
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Decomposition.
- Emerging Markets.
- Inequality.
- Labor Policies.
- Poverty Impact Evaluation.
- Poverty Reduction.
- Private Sector Development.
- Services & Transfers to Poor.
- Social Protections and Labor.
- Local Subjects:
- Decomposition.
- Emerging Markets.
- Inequality.
- Labor Policies.
- Poverty Impact Evaluation.
- Poverty Reduction.
- Private Sector Development.
- Services & Transfers to Poor.
- Social Protections and Labor.
- Physical Description:
- 1 online resource (26 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2013
- System Details:
- data file
- Summary:
- 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.
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