International Trade and Income Inequality: The Case of Latin American Countries

Abstract

The literature suggests that international trade may have different results over income inequality according to a country’s trade and economic structure. The main goal of this article is to analyze the impact of international trade on income inequality in Latin American countries between 1997 and 2020. Our results suggest that international trade variables, such as trade openness and economic complexity, are highly significant and have impacted the income distribution. The results show that following the process of trade openness, the “simplification” of the economy led to a reduction in income inequality in the region.