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Master Thesis

Unveiling the Cosmic Race: Racial Inequalities in Latin America

Abstract : This paper provides evidence of the welfare consequences of racial discrimination at the individual and racial inequality at the country levels in Latin America. Latin American countries built their national identities through a 'melting pot' ethnic figure: the 'Cosmic Race' or the mixed-race descendant from the European, Indigenous, and African populations. However, mestizaje identity veiled income inequalities between racial groups. Using LAPOP AmericasBarometer data, I compile information on skin tone and proxies for income for nearly 100 thousand individuals across Latin American countries during the last decade. The purpose of the paper is twofold. In the first part, I use Spatial First Differences to provide causal estimates of the racial income gap: out of an eleven-color palette, every darker skin tone has at least 8 percent less monthly income per capita. I also use Oaxaca-Blinder decompositions to provide causal evidence that racial discrimination is the main mechanism driving the racial gap: two-thirds of the latter is due to racial discrimination, with substantial heterogeneity between countries. In the second part of the paper, I estimate newly racial inequality measures at the country level. Countries with higher income inequality between racial groups have worse economic development: a one percent increase in the ratio of racial over total income inequality correlates with a decrease of nearly 4 percent in GDP per capita. The results suggest that, besides justice or reparations, progressive policies on income or wealth can diminish racial inequalities and improve aggregate welfare.
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Master Thesis
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https://dumas.ccsd.cnrs.fr/dumas-03461224
Contributor : Paris School of Economics École d'économie de Paris Connect in order to contact the contributor
Submitted on : Wednesday, December 8, 2021 - 4:52:33 PM
Last modification on : Friday, April 29, 2022 - 10:13:05 AM
Long-term archiving on: : Wednesday, March 9, 2022 - 6:03:56 PM

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Luis Guillermo Woo-Mora. Unveiling the Cosmic Race: Racial Inequalities in Latin America. Economics and Finance. 2021. ⟨dumas-03461224⟩

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