Income inequality in Guyana: Class or ethnicity? New evidence from survey data

Abstract

This paper utilises recent survey data to estimate income inequality in Guyana between 1990–2021. It finds that class-based inequality exceeds ethnic income inequality, and the latter is more pronounced in the top 10 percent of the population. The over-representation of Indo- and Indigenous-Guyanese in the top decile increases class inequality within these groups because Afro- and Mixed-Guyanese are over-represented in the bottom 90 percent of the population. Also, the evidence shows that electoral turnover in 2015 increased the dominance of Indo-Guyanese in the top 10 percent relative to other groups. Moreover, the paper demonstrates that fiscal policy has more explanatory power than monetary policy and structural reforms in explaining the dynamics of income inequality. Overall, the evidence indicates that intra-class competition for ethnic dominance of the top decile may account for inter-ethnic conflict as politicians invest in ethnic prejudice to weaken inter-class competition and strengthen the intra-class contest.