A characterization of the changes in the income distribution in Argentina in the period 1992-2014 through an analysis of microdecompositions

Authors

DOI:

https://doi.org/10.52292/j.estudecon.2024.3428

Keywords:

Income inequality, Argentina, Employment, Returns to education, Non-labor income

Abstract

This paper characterizes the evolution of the personal income distribution of the Argentine urban population during the period 1992-2014 using an analysis of econometric microdecompositions. Microsimulations were carried out in partial equilibrium, which do not allow estimating causal effects, but rather quantifying the relative importance of possible determinants of income in a given scenario. The results suggest that the change in the dispersion of men’s labor income is the main determinant of the changes observed in the distribution of household per capita income throughout the period under study. The rise in returns to education explains about 45 percent of the increase in labor income inequality between 1992 and 1999, while the decrease in these returns accounts for 60 percent of the reduction in labor income inequality in the period 2006-2014. The growth in labor participation of women with lower educational levels and the decline in the dispersion of their labor income cushion a significant fraction (15 percent) of the deterioration in income distribution that occurred during the socioeconomic crisis of 1999-2002. The increase in non-labor income, derived mainly from the expansion of the coverage of the social safety net, explains about 30 percent of the reduction in income inequality that took place during the period 2006-2014.

Downloads

Download data is not yet available.

References

Acosta, P. & Gasparini, L. (2007). Capital accumulation, trade liberalization, and rising wage inequality: the case of Argentina. Economic Development and Cultural Change, 55(4), 793-812.

Alejo, J., Bérgolo, M. & Carbajal, F. (2013). Las Transferencias Públicas y su impacto distributivo: La Experiencia de los Países del Cono Sur en la década de 2000. Documento de Trabajo CEDLAS N° 141.

Altimir, O. & Beccaria, L. (2001). El persistente deterioro de la distribución del ingreso en la Argentina. Desarrollo económico, 589-618.

Altimir, O., Beccaria, L. A. & González Rozada, M. (2002). La distribución del ingreso en Argentina, 1974-2000. Revista de la CEPAL. (78), 55-85.

Azevedo, J. P., Sanfelice, V. & Nguyen, M. C. (2012). Shapley Decomposition by Components of a Welfare Aggregate. (MPRA Paper 85584). MPRA_paper_85584.pdf (uni-muenchen.de)

Azevedo, J. P., Inchauste, G. & Sanfelice, V. (2013). Decomposing the recent inequality decline in Latin America. World Bank Policy Research Working Paper 6715.

Barros, R., Paes de Carvalho, M., Franco, S. & Mendoça, R. (2006). Uma Análise das Principais Causas da Queda Recente na Desigualdade de Renda Brasileira. Revista Econômica, 8(1).

Beccaria, L., Maurizio, R., y Vazquez, G. (2014). Recent changes in wage inequality in Argentina. The role of labor formalization and other factors. MPRA Paper 56701.

Bertranou, F. & Maurizio, R. (2011). The role of labour market and social protection in reducing inequality and eradicating poverty in Latin America. Available at SSRN 1857705.

Bourguignon, F., Ferreira, F. & Lustig, N. (1998). The microeconomics of income distribution dynamics in East Asia and Latin America. A copublication of the World Bank and Oxford University Press.

Bosch, M. & Guajardo, J. (2012). Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina’s Moratorium. Inter-American Development Bank Working Papers 366.

Bracco, J., Gasparini, L. & Tornarolli, L. (2019). Explorando los cambios de la pobreza en Argentina: 2003-2015. Economica, LXIV(1).

Bustelo, M., y Lucchetti, L. (2004). La pobreza en Argentina: perfil, evolución y determinantes profundos (1996, 1998 y 2001). Documentos de Trabajo del CEDLAS.

Bustos, P. (2011). Trade liberalization, exports, and technology upgrading: Evidence on the impact of MERCOSUR on Argentinian firms. American Economic Review, 101(1).

Buhmann, B., Rainwater, L., Schmaus, G. & Smeeding, T. (1988). Equivalence scales, wellbeing, inequality and poverty: sensitivity estimates across ten countries using the Luxembourg Income Study database. Review of Income and Wealth, 34, 115-142.

Cornia, G. (2011). Economic integration, inequality and growth: Latin America vs. the European Economies in Transition. Review of Economics and Institutions, 2(2), 1-31.

Cruces, G., y Gasparini, L. (2009). Desigualdad en Argentina. Una revisión de la evidencia empírica: Primera Parte. Desarrollo económico, 395-437.

Cruces, G. & Gasparini, L. (2010). Los determinantes de los cambios en la desigualdad de ingresos en Argentina. Serie de Documentos de Trabajo sobre Políticas Sociales N° 5, Banco Mundial.

Damill, M., Frenkel, R. & Maurizio, R. (2003). Políticas macroeconómicas y vulnerabilidad social: La Argentina en los años noventa. CEPAL.

Damill, M., y Frenkel, R. (2010). Las políticas macroeconómicas en la evolución reciente de la economía argentina. Documento de Trabajo CEDES N° 65.

Fortin, N., Lemieux, T. & Firpo, S. (2011). Decomposition Methods in Economics. Handbook of Labor Economics, 4, 1-102.

Galiani, S. & Sanguinetti, P. (2003). The impact of trade liberalization on wage inequality: evidence from Argentina. Journal of Development Economics, 72(2), 497-513.

Acosta, P., Galiani, S., Cruces, G. & Gasparini, L. C. (2019). Educational upgrading and returns to skills in Latin America: Evidence from a supply-demand framework. Latin American Economic Review, 28, 18.

Galiani, S., Heymann, D. & Magud, N. E. (2017). Income distribution, factor endowments, and trade revisited: The role of non-tradable goods. Journal of Globalization and Development, 8(1).

Garganta, S. (2019). Midiendo el efecto distributivo de la asignación universal por hijo en Argentina: efecto directo, indirecto y potenciales mejoras. Económica, 65.

Garganta, S., y Gasparini, L. (2015). The impact of a social program on labor informality: The case of AUH in Argentina. Journal of Development Economics, 115, 99-110.

Garganta, S. Gasparini, L., Marchionni, M. & Tappatá, M. (2016). The Effect of Cash Transfers on Fertility: Evidence from Argentina. Population Research and Policy Review, 35, 1-24.

Gasparini, L., Marchionni, M. & Sosa Escudero, W. (2005). Characterization of inequality changes through microeconometric decomposition. The case of Great Buenos Aires. En The Microeconomics of Income Distribution Dynamics in East Asia and Latin America, Bourguignon, F., F. Ferreira y N. Lustig (eds.). New York: Oxford University Press.

Gasparini, L. (2005). El fracaso distributivo de Argentina: el papel de la integración y las políticas públicas. En ¿Para bien o para mal? Debate sobre el impacto de la globalización en los mercados de trabajo de América Latina (cap. 1). Banco Interamericano de Desarrollo.

Gasparini, L. (2006). La distribución del ingreso: un breve resumen de tres décadas. Económica (Universidad Nacional de La Plata), 52, 54-74.

Gasparini, L., y Cruces, G. (2008). A Distribution in Motion: The Case of Argentina. Documento de Trabajo CEDLAS N° 78.

Gasparini, L., y Lustig, N. (2011). The Rise and Fall of Income Inequality in Latin America. En Handbook of Latin American Economics (cap. 28). Oxford Academic.

Gasparini, L., Cruces, G. & Tornarolli, L. (2011). Recent Trends In Income Inequality In Latin America. Economia Journal of the Latin American and Caribbean Economic Association, 20, 147-201.

Gasparini, L., Cicowiez, M. & Sosa Escudero, W. (2012). Pobreza y Desigualdad en América Latina: Conceptos, herramientas y aplicaciones. Temas.

Gasparini, L., y Alvaredo, F. (2013). Recent Trends in Inequality and Poverty in Developing Countries. Documento de Trabajo CEDLAS N° 151.

Heckman, J. (1974). Shadow Prices, Market Wages, and Labor Supply. Econometrica, 42(4).

Heckman, J. (1979). Sample Selection Bias as a Specification Error. Econométrica, 47.

Inchauste, G., Azevedo, J. P., Essama-Nssah, B., Olivieri, S., Van Nguyen, T., Saavedra-Chanduvi, J. & Winkler, H. (2014). Understanding changes in poverty. World Bank Publications.

López Calva, L. & Lustig, N. (eds.) (2010). Declining inequality in Latin America: A decade of progress? Brookings Institution and UNDP.

Marchionni, M., y Gasparini, L. (2007). Tracing out the effects of demographic changes on the income distribution. Journal of Economic Inequality, 5(1), 97-114.

Mincer, J. (1974). Schooling, Experience and Earnings. New York: Columbia University Press for NBER.

Navajas, F. H. (1999). Structural reforms and the distributional effects of price changes in Argentina. Working paper.

Pinto, M. F. (2022). Stay at Home With Grandma, Mom Is Going to Work: The Impact of Grandmothers’ Retirement on Mothers’ Labor Decisions. Economic Development and Cultural Change, forthcoming.

Rofman, R., Fajnzylber, E., y Herrera, G. (2010). Reformando las reformas previsionales: en la Argentina y Chile. Revista CEPAL, 101.

Published

2024-01-05

How to Cite

César, A. . (2024). A characterization of the changes in the income distribution in Argentina in the period 1992-2014 through an analysis of microdecompositions. Estudios económicos, 41(82), 31–66. https://doi.org/10.52292/j.estudecon.2024.3428

Issue

Section

Articles