Working paper
Open access

More Unequal or Not as Rich? Revisiting the Latin American Exception

Number of pages80
  • Political Economy Working Papers; 6/2022
First online date2022-08-24

Latin America is often portrayed as a global exception to the rising or consolidating income inequality trends of the early twenty-first century. However, the use of administrative data and macroeconomic aggregates casts doubts on this survey-based narrative. In this paper we revisit the region's exceptionalism by building the most comprehensive data base thus far, which accounts for 80% of the region's population and combines harmonised surveys, social security and tax data, and national accounts. We produce a set of inequality indicators ---pre and post-tax, based on alternative units and income definitions--- which allows us to track the distributional effects of each methodological step and reconcile divergent trends. The reconciliation of micro and macro data present us with a dilemma: either the region is more unequal or it is not as rich as officially reported. The result of distributing the data gaps is a region much more heterogeneous in its inequality trends. Falling inequality is most visible among the bottom 99%, but the trend flattens or reverses in the largest economies once the top 1% and capital incomes are better accounted for. Post-tax and disposable incomes do not change the picture much, except when in-kind social spending is considered. These results confirm the strengths and highlight the limits of Latin America's redistributive policies during the period.

  • Inequality
  • Redistribution
  • Macroeconomic Growth
  • Latin America
Citation (ISO format)
FLORES, Ignacio, DE ROSA, Mauricio, MORGAN, Marc. More Unequal or Not as Rich? Revisiting the Latin American Exception. 2022
Main files (1)
Working paper
  • PID : unige:162830

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