World Bank2012-03-192012-03-192011-04https://hdl.handle.net/10986/2747In 2004 the World Bank released a regional report titled 'Inequality in Latin America: Breaking with History?' Analyzing data from the early 1990s to the early 2000s, a period in which many countries in the region were experiencing increasing inequality, this study raised the question of whether Latin America could reverse its historical pattern of high and persistent inequality. The report concluded that although not easy, breaking with history was more than ever possible in the region. An additional decade of data presented in this brief shows that it was possible, mainly due to changes in labor markets (including a reduction in educational inequality and the skill premia, and greater female labor force participation), a higher incidence of government transfers, and additional factors such as demographic changes. The decrease in inequality is driven mostly by improvements in labor income, particularly a reduction in skill premiums, reflecting improved access to education as well as other factors. In contrast to the recent Latin American trends, Asia is witnessing rising inequality, pushed up by China and India - where income has traditionally been more equal. However, inequality remains very high in Latin America, with levels significantly above other middle income countries. As Latin America enters a new decade, it does so knowing that inequality reduction is possible in the region.CC BY 3.0 IGOACCESS TO EDUCATIONADVERSE IMPACTSANDEAN REGIONANNUAL CHANGEANNUAL RATEANNUALIZED % CHANGEBASIC FOOD BASKETCARIBBEAN REGIONCASH TRANSFERSCHRONIC POVERTYCOUNTERFACTUALDATA COLLECTIONDECLINING INEQUALITYDEMAND-SIDEDEMOGRAPHIC CHANGESDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDISPOSABLE INCOMEDISTRIBUTIONAL IMPACTDOWNWARD BIASELASTICITYEMPLOYMENT OPPORTUNITIESEQUAL DISTRIBUTIONEQUALIZING EFFECTEQUITABLE DISTRIBUTIONEXOGENOUS SHOCKSEXTREME POVERTYEXTREME POVERTY LINEFARMING ACTIVITIESFEMALE PARTICIPATIONFOOD BASKETFOOD PRICESGINI COEFFICIENTGINI INDEXGROSS INCOMEHOUSEHOLD CONSUMPTIONHOUSEHOLD INCOMEHOUSEHOLD PER CAPITA INCOMEHOUSEHOLD SIZEHOUSEHOLD SURVEYHOUSEHOLD SURVEYSHOUSEHOLD WELFAREHUMAN CAPITALHUMAN DEVELOPMENTIMPACTS ON POVERTYINCOME DATAINCOME DISTRIBUTIONINCOME INEQUALITYINCOME LEVELSINCOME POVERTYINCOME QUINTILEINCOME QUINTILESINCOME SHAREINCOME SOURCEINCOME SOURCESINCOMESINCOMES AT THE TOP OF THE DISTRIBUTIONINCREASING INEQUALITYINEQUALITYINEQUALITY CHANGESINEQUALITY MEASURESINEQUALITY REDUCTIONINFORMAL EMPLOYMENTINSURANCEINTERNATIONAL COMPARISONSLABOR DEMANDLABOR FORCELABOR INCOMELABOR MARKETLABOR MARKETSLIFE EXPECTANCYMALNUTRITIONMARKET INCOMEMEAN LOG DEVIATIONMEDIUM LEVELSMIDDLE CLASSMONETARY TRANSFERSNATIONAL POVERTYNATIONAL POVERTY LINENET EFFECTNET IMPACTPENSIONSPERSISTENT INEQUALITYPOLICY RESEARCHPOLITICAL ECONOMYPOORPOOR CHILDRENPOOR RURAL HOUSEHOLDSPOSITIVE IMPACTPOVERTY GAPPOVERTY INCIDENCEPOVERTY INCREASESPOVERTY INDEXPOVERTY LEVELSPOVERTY RATEPOVERTY RATESPOVERTY REDUCTIONPRIMARY EDUCATIONPRIVATE TRANSFERSPROGRAMSPUBLIC TRANSFERSQUESTIONNAIRESREDUCING INEQUALITYREDUCING POVERTYREDUCTION OF INEQUALITYREGIONAL REPORTREPEATED SHOCKSRISING INEQUALITYRURALRURAL POORRURAL POVERTYSAFETY NETSAFETY NET SYSTEMSSAFETY NETSSANITATIONSCHOOLINGSECTORAL COMPOSITIONSKILL PREMIUMSKILLED EMPLOYMENTSKILLED LABORSKILLED WORKERSSOCIAL ASSISTANCESUB-REGIONSSUBREGIONSSURVEY DESIGNTARGETINGTAXATIONUNEMPLOYMENTVULNERABLE GROUPSWAGE INEQUALITYWAGESWELFARE MEASURESWELL-BEINGWorld Bank10.1596/2747