A characterization of the changes in the income distribution in Argentina in the period 1992-2014 through an analysis of microdecompositions[Una caracterización de los cambios en la distribución del ingreso en Argentina en el período 1992-2014 mediante un análisis de microdescomposiciones]

This paper characterizes the evolution of the personal income distribution of the Argentine urban population during the period 1992-2014 using an analysis of econometric microdecompositions. Microsimulations were carried out in partial equilibrium, which do not allow estimating causal effects, but rather quantifying the relative importance of possible determinants of income in a given scenario. The results suggest that the change in the dispersion of men’s labor income is the main determinant of the changes observed in the distribution of household per capita income throughout the period under study. The rise in returns to education explains about 45 percent of the increase in labor income inequality between 1992 and 1999, while the decrease in these returns accounts for 60 percent of the reduction in labor income inequality in the period 2006-2014. The growth in labor participation of women with lower educational levels and the decline in the dispersion of their labor income cushion a significant fraction (15 percent) of the deterioration in income distribution that occurred during the socioeconomic crisis of 1999-2002. The increase in non-labor income, derived mainly from the expansion of the coverage of the social safety net, explains about 30 percent of the reduction in income inequality that took place during the period 2006-2014