Salary Inequality In Chile Through A New Indicator, 1845-2020
Abstract
We provide a new indicator of salary inequality for Chile: the ratio of the salary of the Finance Minister compared to that of the lowest paid worker in the Ministry of Finance (1845-2020). The ratio indicates the ideas that the political elite has about its own “worth”, and that of those at the bottom, thus providing a new story about political views on inequality. We found that between 1845 and 1900 this ratio was very high (25-42), declining sharply during the 1900s-1910s, but climbed up to 14-16 between 1910 and 1930. Thereafter there was a new decreasing trend, with the lowest value reached in 1960 (6). Between 1970 and 2000 it moved within the range 9-10, to increase to 13-18 during the last two decades. According to this ratio, the most egalitarian period would be the 1940s-1960s, when a welfare state emerged in the country. In turn, the changes in this ratio were mainly the result of variations in the bargaining power of civil servants and low skilled workers, with actors competing to increase their participation in the national income.
Keywords: Chile, income inequality, salary inequality, top incomes.
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