suggests that the commodity boom may have translated into earnings growth among workers in rural areas who were specialized in the tradable sectors (including primary activities, mining, and manufacturing). These countries, plus Costa Rica, El Salvador, Nicaragua, and Panama, showed the largest narrowing in the urbanrural wage gap after 2003 (figure 12, panel b).

Figure 14. The average gender and urban-rural wage gaps, Latin America, 1993–2013 a. Gender labor earnings gap b. Urban-rural labor earnings gap _Source:_ Seventeen Latin American countries: SEDLAC database; Russia: the Russia Longitudinal Monitoring Survey; Post Apartheid Labor Market Series: South Africa; Turkey: I2D2-LFS; the United States: I2D2-IPUMS. See annexes A.1 and A.2 for details. _Note:_ The underlying data represent the change in wage inequality and the change in the earnings premiums for each country and circa period. The years selected for each country-circa combination may be different depending on the survey availability and to assure, to the extent possible, within country comparability for each period; see annex B.1 for details. In the case of the y-axis, the growth rate of the gender and area of residence gap is plotted. For the x-axis, the growth rate of the labor income Gini is plotted. The reference category of the gender gap is a woman, and the reference category of the residence earnings gap is rural areas. See section 3 and equation 1 for details. The sample covers full-time, wage, and self-employed workers 15–64 years of age. The values of the 1st and 100th percentiles of the earnings distribution were trimmed by each gender-education cell. The size of the bubbles represent the population of the country.

# **Summary and correlations: Earnings inequality and observed labor market structure**

Table 1 presents a summary of the main findings on the dynamics of labor market returns in Latin America over the last two decades. We can conclude that the four measures of earnings gaps that we have analyzed— the education premium, the experience premium, the gender earnings gap, and the urban-rural earnings gap— have exhibited significant declines since the early 2000s (with the exception of the gender wage gap in 2010– 13) relative to the changes observed in 1993–2003. Moreover, if we split the later period into 2003–2010 and 2010–13, we are able to uncover additional dynamics across the various measures of labor market returns. First, both measures of the education premium analyzed in this study—college relative to primary educational attainment and secondary relative to primary educational attainment—registered a more rapid reduction during 2003–10 than during 2010–13. Second, the same dynamics occurred in the urban-rural labor earnings gap. Indeed, this gap remained steady during the more recent years after a substantive compression during the commodity boom (2003–10). Third, all four measures of the experience premium showed a significant decline in 2003 that accelerated in 2010. One plausible factor in the dynamics of this phenomenon is skills obsolescence among older age-groups because of the rapid developments in information and communication technology in labor markets and the increasing mechanization and automation in sectors that have traditionally been intensive classified the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Paraguay, and Uruguay as noncommodity boom countries, while excluding Costa Rica, Nicaragua, and Panama from the analysis because of data limitations.

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