Inequality at Low Levels of Aggregation in Chile*

Abstract

Despite success in reducing poverty over the last twenty years, inequality in Chile has remained virtually unchanged, making Chile one of the least equal countries in the world. High levels of inequality have been shown to hamper further reductions in poverty as well as economic growth, and local inequality has been shown to affect such outcomes as violence and health. The study of inequality at the local level is thus crucial for understanding the economic well-being of a country. Local measures of inequality have been difficult to obtain, but recent theoretical advances have enabled the combination of survey and census data to generate estimates of inequality that are robust at disaggregated geographic levels. In this paper, we employ this methodology to produce consistent and precise estimates of inequality for every county in Chile. We find considerable heterogeneity in county-level estimates of inequality, with Gini coefficients ranging from 0.41 to 0.63. An appendix includes estimated inequality for each county so the broader research community may assess the effect of local inequality on a broad range out outcomes, as well as analyze the determinants of inequality itself.inequality, poverty mapping, government subsidies, cash transfers, Chile