Income Distribution and the Quality of Life in Latin America: Patterns, Trends, and Policy Implications

Abstract

Latin America, more than other regions of the capitalist world, has been characterized by persistently high concentration of income and wealth and by limited trickling-down of the material gains from output growth. This situation was an enduring characteristic of modern economic growth in Latin America during its era of crecimiento hacia afuera, from the mid-nineteenth century to the onset of the Great Depression of the 1930s. It has remained so, with some modification, during the subsequent half-century, despite industrialization, rapid urbanization, the spread of education, and other conquistas sociales in many of the countries, and despite the faster economic-growth rates since World War II. Indeed, a further rise of income concentration accompanying that postwar growth is statistically detectable in many of the countries. By combining pre-World War II data with plausible inference, one can also deduce a still longer-run rising-concentration trend from the mid-nineteenth century, with oscillations downward in periods of slow growth and upward during fast growth periods. The result in most countries has been a slow improvement at best for the lowest 60 percent of the population in the more measurable and less ethnocentric dimensions of that amorphous concept, the quality of life.