When did Chile fall asleep? An assessment of national and regional income inequality in Chile, 1973-1990

In the two decades after General Augusto Pinochet seized power in September 1973, the Chilean economy transformed; a series of orthodox and liberal reforms aimed at “liberalisation, stabilisation and privatisation” were lauded as a “miracle.” But while hyperinflation was reduced and GDP per capita growth restored, most economists agree that this came at the cost of a spike in income inequality across the 1970s and 1980s. However, our knowledge of this inequality is limited as most studies implicitly assume a household survey which only covers the capital, Gran Santiago, to be representative of the whole country. This dissertation scrutinises this assumption by using novel social tables and wage estimates to construct a Gini coefficient time series for the 1980s which can be disaggregated by region. First, I demonstrate that developments in Gran Santiago were not representative of the whole country in the 1980s, before presenting a new national labour income inequality series for the period, showing a decline in inequality. While this new series is only a partial measure of inequality, it suggests a more complicated picture than previous studies, and as such demonstrates the need for a reassessment of the relationship between Pinochet’s economic policies and income distributions.