Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

This international comparison highlights both the similarities and the differences
between Argentina and a series of developed countries since the early 20th century.
While relatively comparable in terms of average income, these initial conditions also
indicate that inequality was substantially higher in Argentina by the late 1930s, and
while it experienced a post World War II downward trend, the level of inequality
remained substantially higher than that of advanced economies over most of the
period.
3. An Episodic History of Income Distribution in Argentina
in the late 20th and the early 21 st centuries.Evidence from
households’ surveys
3.1. Overall evolution and other data sources
This section reviews the evolution of income inequality in Argentina between the
mid-1970s and the mid-2000s, some of the factors affecting this evolution, and a
comparison with other Latin American countries. The empirical evidence relies on
information from households’ surveys, which are available since 1974.
Over this period inequality increased substantially, irrespective of the measure
employed, but with upward and downward movements. 8 Figure 8 presents a summary
of this evolution by depicting the Gini coefficient for the distribution of household per
capita income in the Greater Buenos Aires area (GBA) for years of relative stability.
The Gini coefficient soared from 0.344 in 1974 to 0.487 in 2006. 9 The upward trend
is statistically significant, as shown in Table 1. It is also robust to the choice of
indicator: the share of the poorest quintile declined from 7.1% to 3.7%, the share for
the richest quintile rose more than 10 percentage points, from 41.8% to 53.2%, and
the 90/10 income ratio increased from around 5 in 1974 to 11 in 2006. 10
8 This section builds on Gasparini and Cruces (2008) and Gasparini et al. (2009), developed for the thematic
Cluster on Poverty, Human Development and MDG’s of the Regional Bureau for Latin America and the
Caribbean (RBLAC), United Nations Development Programme (UNDP).
9 The microdata behind these figures come from Argentina’s main official household survey (Encuesta
Permanente de Hogares, EPH), which covers the main urban areas of the country. The EPH started in the
1970s as a survey for Greater Buenos Aires (GBA), which accounts for one third of Argentina’s
population, and was gradually extended later to cover all urban areas with more than 100,000 inhabitants.
As most periodic household surveys in the world, the EPH records labor incomes and cash transfers
mainly, but it is weaker in capturing capital income, rents to natural resources and other sources of nonlabor
income.
10 Gasparini (2005b, 2007) also establishes that this trend is robust to a host of methodological issues,
including non-response, misreporting of income, inclusion of non-monetary income, inclusion of implicit
rent from own housing, accounting for family structure through equivalization, and adjustment for regional
prices, among other factors.