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New Century, Old Disparities: Gender, Ethnicity, and Income Inequality in Latin America

By Alexandra Bobak
December 5, 2012

Education remains the best means to address persistent income inequality based on gender and race in Latin America, argued Hugo Ñopo.  Ñopo, a leading economist at the Inter-American Development Bank, presented the findings from his latest book, New Century, Old Disparities: Gender, Ethnicity, and Income Inequality in Latin America on December 5 at the Inter-American Dialogue.

Using data from 20 countries, Ñopo highlighted a consistent earnings gap between women and men at every income percentile.  The most extreme gaps were found at the lowest levels of the earnings distribution; the poorer a woman, the less she earns compared to a man.  When accounting for factors such as children, level of education, part-time work, and urban areas, in all cases, the earnings gap for poor women increased while the gap at the higher end of the income distribution remained about the same. 

Ñopo found even greater inequalities when disaggregating by ethnicity and race. Although he noted a lack of adequate data in the region, the findings from Bolivia, Brazil, Chile, Ecuador, Guatemala, Paraguay and Peru, revealed larger gaps.

There are important policy implications for these findings, Ñopo argued. He made the case for tackling racial inequality through education.

Marcelo Paixão, head of the Race and Data Institute at the Federal University of Rio de Janeiro, was critical of Ñopo’s approach and advised against a sole focus on education as a tool for tackling income inequality. “Education is very important but if you don’t pay attention to what is going on in the interior of the education space, you may not be able to catch this problem,” Paixão remarked. He advocated for a more robust discussion of the role played by discrimination and racism.  One way to do this would be to bring affirmative action into the discussion about education.  Ethnicity generates social exclusion and Brazil has begun and must continue to focus on this as an explanation for its social problems.

Brazil stood out from the rest of the region, having the largest gender income gaps, the smallest race income gaps, and exhibiting the greatest decrease in income inequality overall.  

The next challenge is to communicate these results to policymakers in Latin America so that they can inform decision-making that will directly influence income inequality in the region.   Panelists recognized an indirect outcome of Ñopo’s work was that it highlighted the significant gaps in available data, particularly disaggregated by race. Better quality data would greatly improve the region’s understanding of income inequality as it affects race and allow the region to better target and monitor policies to reduce the gaps.