Ortiz-Juarez, EduardoLustig, NoraLopez-Calva, Luis F.2013-09-272013-09-272013-07https://hdl.handle.net/10986/15915Inequality in Latin America unambiguously declined in the 2000s. The Gini coefficient fell in 16 of the 17 countries where there are comparable data, and the change was statistically significant for all of them. Existing studies point to two main explanations for the decline in inequality: a reduction in hourly labor income inequality, and more robust and progressive government transfers. Available evidence suggests that it is the skill premium -- or, more precisely, the returns to primary, secondary, and tertiary education vs. no schooling or incomplete primary schooling -- that drives the decline in hourly labor income inequality. The causes behind the decline in returns to schooling, however, have not been unambiguously established. Some studies find that returns fell because of an increase in the supply of workers with more educational attainment; others, because of a shift in demand away from skilled labor.en-USCC BY 3.0 IGOACCOUNTINGACTIVE LABORACTIVE LABOR MARKETACTIVE LABOR MARKET POLICIESANNUAL % CHANGEAVERAGE CHANGEBASIC EDUCATIONBIRTH RATESCAPITAL ACCUMULATIONCOLLEGE GRADUATESCONCENTRATION COEFFICIENTSCOUNTERFACTUALSDECLINING INEQUALITYDEMAND-SIDEDEMOCRACYDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDISTRIBUTIONAL CHANGESDRIVERSEARNINGECONOMIC CONDITIONSECONOMIC GROWTHECONOMIC REVIEWEDUCATIONAL ATTAINMENTEDUCATIONAL LEVELSELASTICITYEMPLOYMENTEMPLOYMENT EFFECTSEQUALIZING EFFECTEXPLANATORY VARIABLESFORMAL EDUCATIONGINI COEFFICIENTGLOBAL DEVELOPMENTGROWTH COMPONENTGROWTH SPELLSHOUSEHOLD INCOMEHOUSEHOLD SURVEYSHUMAN CAPITALHUMAN DEVELOPMENTHUMAN RESOURCESINCIDENCE OF POVERTYINCOMEINCOME DISTRIBUTIONINCOME INEQUALITYINCOME REDISTRIBUTIONINCOME SOURCEINCOMESINEQUALITYINEQUALITY CHANGESINEQUALITY MEASUREINEQUALITY TRENDSINVERSE RELATIONSHIPLABOR INCOMELABOR MARKETLABOR MARKET INSTITUTIONSLABOR MARKET POLICIESLABOR RELATIONSLABOR SUPPLYLEVELS OF EDUCATIONMEAN INCOMEMIGRANTMINIMUM WAGEMINIMUM WAGESOPPORTUNITY COSTPENSIONSPER CAPITA INCOMEPER CAPITA INCOMESPOLICY CHANGESPOLICY DISCUSSIONSPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOLITICAL ECONOMYPOOR HOUSEHOLDSPOVERTY LINEPOVERTY MEASURESPOVERTY REDUCTIONPOWER PARITYPRIMARY EDUCATIONPRIMARY SCHOOLPRIMARY SCHOOLINGPRIVATE TRANSFERSPRODUCTION FUNCTIONPROGRAMSPROGRESSPUBLIC EXPENDITUREPUBLIC SPENDINGPUBLIC TRANSFERSPURCHASING POWERPURCHASING POWER PARITYQUALITY OF EDUCATIONREAL EXCHANGE RATEREAL WAGESREDISTRIBUTIVE POLICIESREDUCING POVERTYREGIONAL AVERAGESRELATIVE CONTRIBUTIONSRELATIVE DEMANDRELATIVE DISTRIBUTIONRELATIVE SUPPLYRELATIVE WAGESREMITTANCEREMITTANCESRENTSRESIDUAL TERMRESPECTRURAL AREASSCHOOL ENROLMENTSECONDARY EDUCATIONSECONDARY SCHOOLSECONDARY SCHOOLINGSKILL GROUPSSKILL PREMIUMSKILL PREMIUMSSKILLED LABORSKILLED WORKERSSOCIAL POLICYTERTIARY EDUCATIONUNEMPLOYMENTUNEMPLOYMENT RATESUNSKILLED LABORUNSKILLED WORKERSURBAN AREASWAGE DIFFERENTIALSWAGE INEQUALITYWAGE LEVELSWAGE PREMIUMgovernment transfersWorld Bank10.1596/1813-9450-6552