There are multiple ‘windows’ through which a country’s income distribution can be observed and its inequality measured. Useful insights into people’s incomes can be derived from at least five sources: censuses, national account statistics, household surveys, tax records, and other administrative datasets on social security and wages. A review of the literature and data compilations on income inequality in the world reveals that there are often different levels of inequality for a particular country in any given year. More importantly, different series frequently exhibit year-to-year variations that do not always align.
While official inequality statistics primarily rely on household surveys, the range of available estimates has expanded significantly over the past two decades. This growth stems from numerous studies and databases that apply adjustments to survey data using income tax information to address issues such as under-reporting and non-response. Furthermore, the number of competing inequality series has risen due to efforts aimed at reconciling microeconomic data with National Accounts aggregates.
This project aims to provide a consistent framework for interpreting and navigating through the existing inequality estimates in Latin America and the Caribbean. Through rigorous examination of original data sources, the project will generate measures of income concentration specifically derived from income tax data for the countries in the region. These series will subsequently be triangulated with other data sources.