Industrial Wage Inequality in Latin America in Global Perspective, 1900-2000

Abstract

Standard economic theories of wage inequality focus on the factor-biased nature of technological change and globalization. This paper examines the long-run development of industrial wage inequality in Latin America from a global comparative perspective. We find that wage inequality was comparatively modest during the first half of the twentieth century, but rising much faster during the post-war era than in other industrial countries. In-depth analyses of wage inequality trends in Argentina, Brazil, and Chile confirm this pattern, but also reveal notable country peculiarities. In Argentina and Chile, trend breaks coincided with large political-institutional shocks while in Brazil, wage inequality increased unabated under the wage regulation policies of successive post-war administrations. We argue that without taking national policies with respect to education and the labor market into account, economic theory cannot explain "Latin American" patterns of wage inequality. © 2011 The Author(s).