Top Incomes in Chile 1957-2007: Evolution and Mobility

Abstract

Using household surveys that cover more than 50 years of the political and economic history of Chile, we investigate changes in the shape and in the composition of the distribution of income in Chile, in particular of top 10 % and top 1% incomes. In line with international evidence top income concentration appears to be countercyclical in the short run. For the entire length of this survey, this concentration shows roughly an inverted U-shape, peaking at the end of the 80s. These changes correspond approximately with different economic models prevailing in Chile. We observe important changes in the composition of top income groups related to greater relative importance of women, employees and college schooling levels. These changes are stronger for the top 10% than the top 1% of incomes. Additionally, using a national level panel of households for the period 1996-2006 we explore correlations between probabilities of permanence and arrival to the top decile with variables such as composition of the household, ownership of physical and human assets, job quality and active persons in the labor market.