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AbstractThis article studies the relationship between economic growth and income inequality using panel data for a sample of Latin American countries in the period 1960–2000. Different estimation techniques and specifications are tested. Results indicate that the level of inequality has had a different effect on growth in the region, depending on the level of gross domestic product per capita. Even within a sample of developing countries, the effect of inequality on growth is negative for poorer countries, whereas for richer ones higher inequality may favour economic growth. Overall, our results are not robust to different specification techniques, and coefficients are in some cases only weakly significant, underlying the difficulties in finding a strong and robust relationship between income inequality and economic growth.

AbstractExtending social security coverage to self‐employed workers is a major challenge in Latin America. In 2007, Uruguay eased the rules applying to its "single tax" social security scheme for microenterprises, as a result of which a considerable number of self‐employed workers were able to join. The authors analyse the characteristics and employment conditions of these workers between 2000 and 2010, look at how social security coverage increased as a result of the amended single tax scheme, and assess the scheme's potential for incorporating greater numbers of workers.

There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children's birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother's smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty.