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The Recent Rise Of Urban Wage Inequality

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Chapter Summary

This chapter assesses long term changes in the within-factor income distribution, focusing on changes in the distribution of urban formal sector wages. Specifically, it argues that urban formal sector wage inequality has been relatively modest in many Latin American countries (LACs) until, at least, the 1970's. The chapter adopts an international comparative perspective, including the US, Canada and Australia to highlight the specific 'Latin' features of the long run trend in urban wage inequality. It analyses some detailed early 20th century wage distribution surveys in Argentina, showing that urban wage inequality was indeed modest compared to international standards. It also examines the long run trends in the distribution of manufacturing wage income in a Theil-index framework. Finally, the chapter discusses a number of hypotheses to explain the recent rise in urban wage inequality, placing the events of the last quarter of the 20th century in an integrative historical context.

Keywords: Latin American countries (LACs); Theil-index framework; urban wage inequality; wage distribution surveys; within-factor income distribution



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