Nº 129 (February, 2012). Javier Alejo.
“Relación de Kuznets en América Latina. Explorando más allá de la media condicional”.
This paper presents an analysis of the Kuznets relationship in Latin America in order to characterize the change in the trend of income inequality in the recent years. Using household surveys, a panel of Latin American regions with data on inequality and development is constructed, with higher quality than those previously used in the empirical literature on the Kuznets hypothesis. Changes in inequality are associated with multiple observable factors related to development such as economic growth, the level of human capital, openness, urbanization and economic stability, among others, with a multiplicity of determinants that are not easily measured by empirical work. The incorporation of conditional quantile analysis allows studying whether this set of non-measurable factors can lead to heterogeneous paths of development and equity. Results show that the practical significance of the Kuznets relationship depends on the interaction with the rest of the variables related to development. Once all these factors are incorporated into the analysis, the findings suggest that it is unlikely that the observed change in the trend in inequality in Latin America is related to economic growth.