THE MICROECONOMICS OF INCOME DISTRIBUTION DYNAMICS IN EAST ASIA AND LATIN AMERICA François Bourguignon Francisco H. G. Ferreira Nora Lustig Editors THE MICROECONOMICS OF INCOME DISTRIBUTION DYNAMICS IN EAST ASIA AND LATIN AMERICA [...]... Earnings and Household Income in Mexico, 1984 and 1994 Characteristics of the Labor Force in Mexico, 1984 and 1994 Selected Results from Earnings Equations for Mexico Decomposition of Changes in Inequality in Earnings and Household Income in Mexico, 1984–94 Rural Effect in the Decomposition of Changes in Inequality in Earnings and Household Income in Mexico, 1984–94 Evolution of the Structure of the. .. trends in the distribution of income and with the pace of economic development (see table 1.1) For example, during 1980–2000, growth in GDP per capita was considerably higher in East Asia than in Latin America Also, Latin America showed higher initial levels of income inequality and (with the exception of Brazil) sharper upward trends as well In most economies, however, the average years of schooling, the. .. Society (in particular in Latin America and the Far East) ; of the European Economic Association (in Venice); of the Network on Inequality and Poverty of the IDB, World Bank, and LACEA (Latin American and Caribbean Economic Association); and at the Universities of Brasília, Maryland, and Michigan, The Catholic University of Rio de Janeiro, the European University Institute in Florence, and DELTA (Département... recommendations should also be informed by more in- depth country studies The method proposed is applied to seven economies in this volume: three in East Asia and four in Latin America. 4 The East Asian economies are Indonesia, Malaysia, and Taiwan (China) The Latin American ones are Argentina (Greater Buenos Aires), Brazil (urban), Colombia, and Mexico.5 Latin America and East Asia have had rather different experiences... household income distributions The approach thus applies to problems related to the distribution of total income, rather than only those related to the distribution of earnings The method can shed light on the evolution of the entire distribution, rather than merely on the path of summary statistics And it can decompose any change in the incomes of a set of households into its fundamental sources: changes in. .. increased only slightly in Taiwan, China, but it rose substantially in Indonesia and in the Latin American countries Average family sizes went down everywhere, falling by a full person or more in Brazil and Colombia In terms of economic growth, the disparity of experiences fits neatly into the expected continental lines The three Asian economies grew so fast since the end of the 1970s that income per capita... accompanied by changes in the structure of the economy that have repercussions on income distribution Nevertheless, the net outcome in terms of the change in the Gini coefficient is far from uniform It ranges from a decline of 0.4 Gini points in (urban) Brazil to a rise of 8.4 Gini points in (the Greater Buenos Aires area of) Argentina However, these changes are not perfectly comparable across the seven economies... affect the distribution of welfare has been rudimentary by comparison Yet understanding development and the process of poverty reduction requires understanding not only how total income grows within a country but also how its distribution behaves over time Our knowledge of the dynamics of income distribution is presently limited, in part because of the informational inefficiency of the scalar inequality... schooling, the share of urban population, and the participation of women in the labor force rose, while the average size of households fell Given the similar demographic and educational trends in practically all the economies, what explains the differences in the evolution of inequality? We hope that learning about the forces at work in the Asian and Latin American contexts will provide new insights for development... its own income distribution, with its own mean and its own level of inequality.1 These models show that different combinations of initial conditions and of the historical processes that might follow them—could lead to diverse outcomes In this book, we do not suggest yet another grand theory of the dynamics of income distribution during the process of development Instead, we propose and apply a methodology . Lustig Editors THE MICROECONOMICS OF INCOME DISTRIBUTION DYNAMICS IN EAST ASIA AND LATIN AMERICA