Article in Press
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Abstract
This study aims to examine the factors contributing to inequality in Latin America, using the Gini index as the main indicator. In this regard, the correlation between this index and various socioeconomic factors during the period 1990-2022 is analysed. To achieve this, data were collected from ten countries in the region (Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru, and Uruguay), investigating the influence of factors such as per capita income, poverty rate, life expectancy at birth, education expenditure as a percentage of GDP, unemployment rate, and spending on research and development on the degree of inequality.
The methodology employed corresponds to a panel data model, which allowed for the examination of country-specific differences and the changes that took place over a 30-year period. To ensure the reliability of the findings, regression analyses were conducted based on both fixed and random effects. In addition to a correlation analysis, a "Granger non-causality test" was also applied to investigate, primarily, the causal link between per capita GDP and inequality levels.
A negative and statistically significant correlation was found between per capita GDP and the Gini coefficient, indicating that economic growth is associated with a reduction in inequality in the region. It was also observed that the poverty rate has a positive and significant effect on the Gini coefficient. However, the effect of public education expenditure on inequality has not been statistically significant, while variables such as investment in research and development also do not appear to have been highly influential on the issue.
These findings highlight the importance of promoting economic development and implementing effective poverty alleviation measures as key approaches to reducing income asymmetry in Latin America.
