Resource information
Latin America is together with
Sub-Saharan Africa the most unequal region of the world.
This paper documents recent inequality trends in the Latin
American region, going beyond traditional measures of income
inequality. The paper also reviews some of the explanations
that have been put forward to understand the current
situation, and discusses why reducing income inequality
should be an important policy priority. In particular, the
authors discuss channels through which inequality can affect
growth and output volatility. On the whole, the analysis
suggests a two-pronged approach to reduce inequality in the
region that combines policies aimed at improving the
distribution of assets (especially education) with elements
aimed at improving the capacity of the state to redistribute
income through taxes and transfers.
