Top Income Shares in a Growing South American Economy: Ecuador 2004-2011

This paper presents series of top income shares in Ecuador from 2004 to 2011 using individual income tax returns and external control totals for income and population from national accounts and census population projections respectively. First, our results show that the income distribution in this country has followed different growth paths between the bottom 90% of the population and the top income groups. The top groups have experienced a steep increase during this period. Second, income in Ecuador is highly concentrated at the very top of the distribution. In 2011, the share of total income accruing to the top 1% was between 12% and 16%. Third, top income shares have followed an inverted U-shape over this short period of time, suggesting a decline of income inequality. Fourth, contrary to evidence in industrialized countries, high-income individuals in Ecuador are mainly capital and business owners.