Origins of Latin American Inequality

Chapter highlights:

• Historical experiences, especially colonial institutions such as mitas, haciendas, encomiendas and concertajes, are important to explain the income and inequality patterns we observe today in Latin America.

 

• In particular, slavery emerges as a fundamental driver of inequality in the continent at the national and sub-national levels, for countries such as the United States, Brazil and Colombia.

 

• Land also emerges as a key asset driving inequality in the region, where the impact of land reform is multifaceted and complex, as it interacts with the underlying political structure, in the cases of El Salvador, Colombia, Peru and Chile.

 

• Education is another main (portable) asset that can explain the patterns of prosperity and equity in the region as a whole, and at the sub-national level in places such as Colombia, Paraguay and the United States.

 

• In a series of replications of classic studies on the region, we find that commonly used proxies for income have essentially no impact on inequality, pointing to the complex relationship between these last two variables, and opening avenues for further research.