Functional inequality in Latin America: news from the twentieth century

Abstract

This chapter presents a new consistent yearly estimate of gross income (between-group) inequality Ginis for Argentina, Brazil, Chile, Colombia, Mexico and Venezuela over the period 1900–2011, using a newly assembled wage dataset for three occupational categories. The approach used differentiates labour by skill level and allows for changing allocation of the labour force over time. Property income is calculated as a residual. Our regional Gini shows a changing secular process with a reclined “S” shape with an inflection point around 1940 and a peak in the 1990s. There are mixed country trends in the early and middle decades, but in most cases inequality was on the rise in the 1960s. There was also a tendency for narrowing wage inequality in the middle decades of the last century but whose impact was more than offset by a rising share of the top income group. Inequality in the twentieth century is a story of increased polarisation—particularly post-1970—amid significant social mobility.