The Distribution of Income in Central America

34 Pages Posted: 9 Mar 2013

See all articles by T. H. Gindling

T. H. Gindling

University of Maryland, Baltimore County; IZA Institute of Labor Economics

Juan Diego Trejos

Universidad de Costa Rica

Abstract

We document changes in income and earnings inequality in the five Central American countries from the early 1990s to 2009. In the 1990s Costa Rica had the most equal distribution of income in Central America, and one of the most equal distributions of income in Latin America. At the other extreme, Guatemala, Honduras and Nicaragua were among the most unequal countries in Latin America. Inequality in El Salvador was between these extremes. Then, in the first decade of the 21st century inequality in El Salvador and Nicaragua decreased while inequality in Costa Rica, Guatemala and Honduras increased. By 2009 levels of inequality in El Salvador and Nicaragua were similar to those in Costa Rica. In this paper, we examine why income and earning inequality differs between the five Central American countries, and why inequality decreased in El Salvador and Nicaragua but increased in Costa Rica, Guatemala and Honduras.

Keywords: income inequality, Central America, labour income

JEL Classification: O15, J31, O54

Suggested Citation

Gindling, Thomas and Trejos, Juan Diego, The Distribution of Income in Central America. IZA Discussion Paper No. 7236, Available at SSRN: https://ssrn.com/abstract=2230798

Thomas Gindling (Contact Author)

University of Maryland, Baltimore County ( email )

1000 Hilltop Circle
Baltimore, MD 21250
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Juan Diego Trejos

Universidad de Costa Rica ( email )

No Address Available

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