Abstract

In the present chapter, we analyze the relation between tourism specialization, income distribution, and human capital in South America between 1995 and 2015. Causality is studied by applying different approaches. On one hand, the panel data Granger causality test and the test proposed by Dumitrescu and Hurlin are conducted. On the other hand, the individual causality test for each country is considered by applying the classical Granger causality and a novel symbolic causality test. The results suggest that tourism specialization measured as arrival/population (TSA) and receipts/exports (TSR) and human capital cause income distribution. The estimated regressions suggest the existence of a Kuznets curve between tourism specialization and income distribution in South America, presenting threshold for TSA equal to 53.20% and TSR equal to 19.98%. Under these thresholds, tourism specialization increases income inequality, but overpassing them the income distribution improves. In addition, human capital has also a positive effect on income distribution.

Highlights

  • Inequality is one of the main problems in South America; it is both cause and consequence of the region’s polarized structures

  • Note that when a bidimensional variable composed by tourism specialization (TSR or tourism specialization measured as arrival/population (TSA)) and human capital is tested with GINI, most of the results suggest a bidirectional causality or causality running from the bidimensional space (TS, Human capital (HC)) to GINI

  • Governments have invested in tourism infrastructure and international organism such as Inter-American Development Bank (IADB) and World Bank (WB) and have promoted and designed tourism development programs helping to improve employment, poverty, and income distribution in South America

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Summary

Introduction

Inequality is one of the main problems in South America; it is both cause and consequence of the region’s polarized structures. It is believed that tourism may indirectly reduce poverty by the generation of employment, the diffusion of technical knowledge, the stimulation of research, and the development and accumulation of human capital International organisms such as the Inter-American Development Bank (IADB) and World Bank (WB) have designed programs to develop the tourism sector in Latin American countries, helping to reduce poverty and to improve income distribution. South America is one of the most unequal regions of the world; in 1995 the average Gini index was 47.96 and it reduced to 42.50 It means that South American income distribution improves 11% in the last 20 years. The present chapter aims to study the impact of tourism specialization and human capital on income distribution in South America for the period 1995–2015.

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29. London
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