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Income inequality, tourism and resources endowment in Uruguay: a spatial and distributional approach

Author

Listed:
  • Natalia Porto
  • Natalia Espinola
  • Laura Carella

Abstract

It has been widely recognized that tourism plays a crucial role both as an income generator and as a source of employment in many countries. While its impact at local, regional and national level of employment is undoubted, there is a line of research that has pointed out that jobs in tourism sector have less favorable working conditions than other sectors and they could have negative effects on income distribution. Another feature that could be also related to income distribution is the regional endowment of touristic amenities, which could affect tourism activities. Considering these facts, it is possible that the allocation and distribution of amenities in a country could generate regional disparities in income distribution due to tourism. The aim of this study is to explore regional inequalities in wages and its relationship with the development of tourism in Uruguay. We estimate a spatial error model using a balanced panel data set from 2006 to 2019 on 19 Uruguayan departments. We built four indices of touristic amenities and then interact them with tourism employment, as a proxy for tourism development. The evidence suggests that there are some regional disparities in income distribution in tourism sector. Some specifications of the models show a positive relationship between tourism employment and inequality in labor income, and that the departments with cultural-historical amenities tend to have a more equalitarian distribution of labor income.

Suggested Citation

  • Natalia Porto & Natalia Espinola & Laura Carella, 2020. "Income inequality, tourism and resources endowment in Uruguay: a spatial and distributional approach," Asociación Argentina de Economía Política: Working Papers 4393, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4393
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    References listed on IDEAS

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    More about this item

    Keywords

    amenity-led development; income distribution; regional development; spatial econometrics; tourism-related employment; tourism development;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • L8 - Industrial Organization - - Industry Studies: Services
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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