Vertical and Horizontal Inequality in Ecuador: The Lack of Sustainability

We analyse the evolution of vertical and horizontal inequality in Ecuador in the long-run (1990–2016), as well as during and after the recent commodities boom (2005–2014). Using data from censuses, living standard measurement surveys, and employment surveys we show that Ecuador has made significant progress in reducing inequality, particularly since 2000. However, inequality has not decreased further since 2011. We argue that a key factor behind the reduction and ensuing stagnation of inequality is the dynamic of oil revenues, particularly regarding its effect on economic growth and on the financing of redistributive policies. Using the decomposition of the Gini coefficient by income source proposed by Lerman and Yitzhaki (Rev Econ Stat 67:151–156, 1985) we show that during the last decade there has been a shift away from market sources towards sources of income derived from government expenditures. Following the end of the commodities boom, this process is no longer sustainable. Indeed, we show that the underlying causes that led to the change in the sources of income started long before the end of the boom. The temporary shock following the 2008 financial crisis already affected the structure of Ecuador’s public finances and its current account. And, since around 2011, its institutions and labour market indicators have also deteriorated. We conclude that sustainable inequality reductions require improving the current institutions.

     

Interpersonal discounting

Journal of Risk and Uncertainty - Many discounting choices affect both the decision maker and at least one other person. The interpersonal nature of these choices is not well explored because the...     

Correction to: Vertical and Horizontal Inequality in Ecuador: The Lack of Sustainability

Social Indicators Research - The article Vertical and Horizontal Inequality in Ecuador: The Lack of Sustainability, written Ivan Gachet, Diego F. Grijalva, Paúl A. Ponce and Damián...     

Spousal influence and assortative mating on time preferences: a field experiment in the USA

Review of Economics of the Household - Households make economic tradeoffs over time. We seek to understand how a spouse’s individual time preference influences joint household decisions. We...