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Title:Resource booms, inequality, and poverty: The case of gas in Bolivia PDF Logo
Authors:Lay, Jann
Thiele, Rainer
Wiebelt, Manfred
Issue Date:2006
Series/Report no.:Kieler Arbeitspapiere 1287
Abstract:This paper addresses the question of whether the Bolivian gas boom of the 1990s has bypassed large parts of the poor population, thereby leading to increasing inequalities in an already unequal society. Using a Computable General Equilibrium model that is sequentially linked to a microsimulation model, we examine the transmission channels through which the large resource inflows related to the gas boom, both initial foreign investment in the sector and the subsequent export earnings, as well as large public transfer programs affect the distribution of income. These transfers may well be interpreted as a means of redistributing resource rents. Our focus is on labour market impacts, in particular on shifts between formal and informal employment and changes in relative factor prices. Our simulation results suggest that the gas boom induces a combination of unequalising and equalising forces, which tend to offset each other. As net distributional change is limited, growth generated by the boom reduces poverty despite increasing informality.
Subjects:Poverty
Distribution
Computable General Equilibrium Model
Microsimulation
Natural Gas
Bolivia
JEL:D3
O54
D58
Q33
O17
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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