Distribution dynamics and convergence in Latin America: A non-parametric analysis

Abstract

This paper examines the dynamics of income distribution and convergence in Latin America during the period 1960 to 2000. Our results, based on the intradistribution dynamics approach, reveal a “twin peaks” dynamics, which echoes findings reported for the OECD, the Asia Pacific Basin and worldwide. Notable differences, however, are found between the income dynamics in Latin America and in these other regions. Further, our findings indicate that physical capital investment and health capital serve to explain Latin America’s “twin peaks” polarization. Other factors, such as geographical proximity, trade openness and human capital, are also found to help explaining it to some extent.