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The Dynamics of Inequality Change in a Highly Dualistic Economy: Honduras, 1991-2007

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  • Stephan Klasen
  • Thomas Otter
  • Carlos Villalobos Barria

Abstract

We examine the drivers of inequality change in Honduras between 1991-2007, trying to understand why inequality increased in Honduras until 2005, while it was falling in most other Latin American countries. Using annual household surveys, we document first rising inequality between 1991-2005, which is followed by falling inequality thereafter. Using an inequality decomposition technique, we show that the rising inequality between 1991 and 2005 was, for the most part, driven by the dispersion of labour incomes in rural areas.

Suggested Citation

  • Stephan Klasen & Thomas Otter & Carlos Villalobos Barria, 2012. "The Dynamics of Inequality Change in a Highly Dualistic Economy: Honduras, 1991-2007," WIDER Working Paper Series wp-2012-017, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2012-017
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2012-017.pdf
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    References listed on IDEAS

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    1. Frank A. Cowell, 1980. "On the Structure of Additive Inequality Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 521-531.
    2. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    3. F. Bourguignon & M. Fournier & M. Gurgand, 2001. "Fast Development With a Stable Income Distribution: Taiwan, 1979–94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 139-163, June.
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    5. Charity Moore, 2008. "Assessing Honduras’ CCT Programme PRAF, Programa de Asignación Familiar: Expected and Unexpected Realities," Research Report 15, International Policy Centre for Inclusive Growth.
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    7. Francois Bourguignon & Francisco H.G. Ferreira & Nora Lustig, 2005. "The Microeconomics of Income Distribution Dynamics in East Asia and Latin America," World Bank Publications - Books, The World Bank Group, number 14844.
    8. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    9. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
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    11. Stephen Goldfeld & Richard Quandt, 1973. "The Estimation of Structural Shifts by Switching Regressions," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 2, number 4, pages 475-485, National Bureau of Economic Research, Inc.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The dynamics of inequality change in a highly dualistic economy: Honduras, 1991-2007
      by Maximo Rossi in Wikiprogress América Latina on 2012-03-12 18:43:00

    Citations

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    Cited by:

    1. Alex Cobham & Andrew Sumner, 2013. "Is it all about the tails? The Palma measure of income inequality," Working Papers 308, ECINEQ, Society for the Study of Economic Inequality.
    2. Carlos Villalobos Barría, 2012. "Sectorial shifts and Inequality. How to relate macroeconomic events to inequality changes," Ibero America Institute for Econ. Research (IAI) Discussion Papers 219, Ibero-America Institute for Economic Research.
    3. Ms. Evridiki Tsounta & Anayochukwu Osueke, 2014. "What is Behind Latin America’s Declining Income Inequality?," IMF Working Papers 2014/124, International Monetary Fund.
    4. Alex Cobham, Andy Sumner, 2013. "Is It All About the Tails? The Palma Measure of Income Inequality-Working Paper 343," Working Papers 343, Center for Global Development.

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    More about this item

    Keywords

    Education; Equality and inequality; Household survey; Income distribution; Wages;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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