Seventy-five years of measuring income inequality in Latin America
- This paper seeks to summarize what can be said with confidence about the levels and dynamics of income inequality in Latin America, while recognizing the uncertainty that arises from conflicting information from different sources.
- There are substantial differences in inequality levels estimated from household surveys alone and those that incorporate information from tax and social security data, and even more when authors attempt to eliminate aggregate discrepancies with the National Accounts. The difference between Gini coefficients for the same country/year can be as high 17 Gini points.
- These differences are a source of genuine uncertainty because no single method is perfect. Each has its own limitations and no unambiguously clear best estimate is available. This constrains us to work with inequality bands, rather than precise levels.
- Nonetheless, the uncertainty about levels does not really affect the broad dynamic pattern of how inequality has evolved over time. Here, there is remarkable consistency, with most countries in the region having followed an inverted U curve between the 1970s and the 2010s.
