a microeconometric decomposition exercise presented by eclac notes that income per adult and specifically earnings were the main factor in the fall in inequality the demographic factor was found to have had a modest effect on inequality as the dependency ratio fell fairly evenly across all income levels on the basis of an analysis of four middleincome countries in the region argentina brazil mexico and peru lopezcalva and lustig conclude that two main factors account for the easing inequality in the countries a narrowing of the wage gap between highskilled and lowskilled workers and to a lesser extent an increase in government transfers to the lowestincome households