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Colombia INCOME DISTRIBUTION
The question of who has benefited from economic growth
has been
the subject of considerable controversy in Colombia. In
the opinion
of some observers, growth during the 1970s worsened the
skewed
distribution of income. The World Bank, in contrast, has
concluded
that the real incomes of the poorest workers improved
significantly
during the 1970s.
Data from a variety of sources suggest that there was a
redistribution of income toward the two extremes of the
population
during the 1970s. Income growth was faster for those
groups at both
the top and the bottom of the income distribution ladder.
By
contrast, all the evidence suggests that the middle class,
which
did well in the 1960s, lost ground in the 1970s. For the
poor,
increased employment of females and other secondary
workers at
higher wage rates explained most of the improvements; for
the rich,
the higher income of the head of the household accounted
for the
betterment.
Agricultural workers and small landholders made up the
majority
of the poor in Colombia in the late 1980s, although this
proportion
was decreasing. The urban poor consisted mainly of persons
without
primary education, who with their numerous children were
grouped in
large households where few of the members worked. The
poorest
households were often headed by a single parent--typically
a woman.
Those who worked were concentrated in domestic service,
construction, manufacturing, and retail trade. The wages
of the
rural and urban poor stagnated until the mid-1970s,
improved
significantly in the latter half of the decade, but then
deteriorated somewhat in the mid-1980s. Real earnings,
however,
improved more than the wage rates in view of greatly
increased
employment among household members, which was more
significant in
urban locations that had greater opportunities for female
employment. The income per member of poor urban families
also was
likely to have benefited from the decline in fertility in
urban
areas.
Relative wages in low-paid occupations tended to
converge over
the 1970s. Those paid the least at the beginning of the
decade
gained, the better-paid semiskilled workers faced stagnant
or
falling wages, and higher-paid workers suffered
substantial
setbacks. Important factors contributing to the
improvement in the
lot of the poor included rapidly expanding educational
opportunities since the early 1950s, reinforced by
population,
nutrition, and related social policies since the late
1960s.
Strongly complementary was the employment boom of the
1970s that
enabled increasing numbers of women and other "secondary"
workers
in the poorer households to find jobs, significantly
increasing
household incomes.
The economic positions of the higher-income group
apparently
also improved substantially during the 1970s. Rapid
economic growth
in this period provided ample opportunities for raising
entrepreneurial profits, and substantial real interest
rates were
available to owners of capital. The decade also witnessed
booming
markets in coffee, emeralds, urban residential housing,
and illegal
trade.
By contrast, persons in the intermediate range of the
income
distribution fared poorly. This situation was caused in
part by the
surging supply of educated workers during the 1970s.
Data as of December 1988
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