A link to the full paper is here.

Abstract: This paper explores the nature and drivers of inequality in Chile.  It is a companion paper to Lecaros et al (2023) that analyzed the widespread citizen perceptions and concerns over high inequalities and lack of fairness in Chile.  A central theme is that Chile is in a form of “inequality trap”, in which reinforcing elements of the system perpetuate inequality.  This is in spite of the democratic transition of 1990, significant growth, and the large expansion of social provisioning.  Chile has been successful with respect to poverty: there has been a dramatic reduction in absolute income poverty, and a near-universal floor for education, health, and pensions, albeit with pervasive issues of quality. However, most dimensions of inequality are perpetuated through structural features of the socio-economic system. These include: the inter-generational transmission of financial, human, social and cultural capital—notably through the education system; concentrated ownership in the business sector; a segmented labor market; and inequalities in access to mechanisms for managing employment and health risks and income insecurity in old age. There is a polarized discourse around the “neoliberal” model, but the real issues concern how structural inequalities interact with both market and government forces. There is no panacea, but there is substantial scope for public action that can tackle unjustified inequalities while also supporting efficiency. The kinds of systemic change required echo—if in new forms—the large-scale policy and institutional changes that now-industrialized countries went through in the 20^th century, that were only partially modified by the  “neoliberal” reversal from around the 1980s. These were underpinned by major political conjunctures, and there is an important outstanding question as to whether Chile’s politics can support the kinds of changes needed.