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LAC Equity Lab: Labor Income and Wage Distribution

Labor income and wages inequality has remained systematically high in Latin American and Caribbean (LAC) countries. However, important differences among countries and demographic groups emerge when analyzing these two indicators across the income distribution and through the lens of the Gini Index.

This dashboard focuses on the working-age population (15+) in LAC, presenting labor income and wages in two ways: (i) through the Gini Index and (ii) by displaying average values across each decile of the working-age population.


Key concept definitions:

Wage: Hourly wage for salaried workers in their main occupation.

Gini Coefficient: The most common measure of inequality is the Gini coefficient. It is based on the Lorenz curve, a cumulative frequency curve that compares the distribution of a specific variable (for example, income) with the uniform distribution that represents equality. To construct the Gini coefficient, graph the cumulative percentage of households (from poor to rich) on the horizontal axis and the cumulative percentage of income (or expenditure) on the vertical axis. The Gini captures the area between this curve and a completely equal distribution. If there is no difference between these two, the Gini coefficient becomes 0, equivalent to perfect equality, while if they are very far apart, the Gini coefficient becomes 1, which corresponds to complete inequality.

The Labor Database for Latin America and the Caribbean - LABLAC (CEDLAS and the World Bank) is a harmonization project that seeks to mitigate differences arising from country-specific survey design and thus foment comparable indicators between LAC countries. However, methodological changes in the underlying surveys may result in non-comparable data that the harmonization process cannot fully solve. It is important that the user knows what data is and is not comparable. For more information, visit the LABLAC: comparability dashboard.

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