The origins of monetary income inequality. Patience, human capital, and division of labor

Victoria Reyes-García*, Ricardo Godoy, Tomas Huanca, William Leonard, Thomas McDade, Susan Tanner, Vincent Vadez

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

24 Scopus citations

Abstract

We present an explanation about the origins of monetary income inequality when an economically self-sufficient society opens to a market economy. The chain of associations runs from patience, to the accumulation of different forms of human capital, to self-selection into different occupations, and to the division of labor, which contributes to monetary income inequality. In a self-sufficient society, patience is exogenously determined and people rely on folk knowledge as the only form of human capital. With the establishment of schools, patient and impatient people sort themselves out by the type of human capital they begin to accumulate. Impatient people do not acquire folk knowledge because return to schooling takes many years to bear fruit. Schooling opens opportunities in occupations outside the village, whereas folk knowledge enhances employment opportunities that draw on farming or foraging. Self-selection into different occupations with different earnings potential spawns monetary income inequality. To test the explanation, we draw on data from a foraging-farming society in the Bolivian Amazon, the Tsimane'. We collected data during four consecutive quarters in 1999-2000 and a follow-up interview (2004). Data came from 151 adults (age, 16 years or more) from all households (n=48) in two villages with different levels of market exposure. During 1999-2000, impatience was associated with (a) greater folk knowledge and fewer years of schooling, (b) lower likelihood of working in wage labor, and (c) greater likelihood of working in rural subsistence occupations. People who had been patient in 1999-2000 had greater wage earnings and more modern physical assets in 2004.

Original languageEnglish (US)
Pages (from-to)37-47
Number of pages11
JournalEvolution and Human Behavior
Volume28
Issue number1
DOIs
StatePublished - Jan 1 2007

Keywords

  • Amazon
  • Amerindians
  • Bolivia
  • Division of labor
  • Human capital
  • Income inequality
  • Indigenous populations
  • Latin America
  • Patience
  • Tsimane'

ASJC Scopus subject areas

  • Ecology, Evolution, Behavior and Systematics
  • Experimental and Cognitive Psychology
  • Arts and Humanities (miscellaneous)

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