Childhood Poverty in Latin America and the Caribbean ollowing steep declines in poverty rates age 15 continued to be one of the groups most over the past decade, the Latin America disadvantaged in terms of poverty reduction, although and Caribbean (LAC) region reduced public transfer programs targeting families with childhood poverty by a third and childhood children are widespread in LAC. In 2014, childhood extreme poverty almost by half between 2004 and poverty rate (36 percent) was almost twice that of 2014.1 Childhood poverty, defined as the adults (19 percent). From 2004 to 2014 adult poverty percentage of children below the age of 15 living on rates decreased faster than childhood poverty, falling less than $4 per day, fell from 54 percent in 2004 at annualized rates of 5.5 percent per year versus 3.8 to 36 percent in 2014 (Figure 1) in LAC.2 Similarly, percent. Like adult poverty, childhood poverty is the extreme poverty rate for children, which refers higher in rural areas; poverty and extreme poverty to those children living on less than $2.5 per day, rates among rural children are about twice (59 almost halved over the same period from 33 percent percent) those for children in urban areas (29 percent). to 18 percent. In addition, poverty rates in rural areas fell more slowly for children (annualized rate of 12 percent) Despite these gains, children in LAC have seen than for adults (at a 14 percent annualized rate). slower reductions in poverty than the overall Moreover, the gap in childhood poverty between population and continue to be more likely than urban and rural areas remained around 30 adults to live in poverty. Poverty rates remained percentage points from 2004 to 2014, while it fell higher among families with chidren, and kids below from 31 to 25 percentage points among adults. Figure 1. Poverty rates for children in LAC have fallen but remain higher than those of adults Total poverty Extremepoverty Extreme poverty ($4 a day, 2005 PPP) ($2.5 a ($1.90 day, 2005 a day, PPP) 2011 PPP) 60 40 Children Overall Adults 54 Children Overall Adults 33 Extreme poverty headcount (%) 50 42 Poverty headcount (%) 40 30 40 36 33 22 23 29 30 20 18 18 24 23 14 19 20 11 11 10 8 10 0 0 2004 2009 2014 2004 2009 2014 Source: SEDLAC (CEDLAS and the World Bank). Note: The figure reports the poverty headcount rates at $4 per day adjusted to 2005 purchasing power parity (PPP) and the extreme poverty headcount rates at $2.5 per day adjusted to 2005 PPP. The incidence of childhood poverty in Central poverty in the region, with 91 percent living in America and the Caribbean remains the highest in poverty, including 82 percent living on less than $2.5 the region. Haiti had the highest rate of childhood per day (Figure 2). Rates in Guatemala and 1 June 2016 Honduras also remained high, with more than 6 out of childhood poverty, with Chile, at 12 percent, and 10 children living in poverty. On the other hand, Costa Rica, at 16 percent, having the two lowest rates countries in the Southern Cone showed the lowest in the region. Figure 2. Childhood poverty rates ($4 per day) are higher in Central America and the Caribbean (2014) Note: Tabulations based on SEDLAC (CEDLAS and the World Bank). Note: Children are defined as ages 14 and under. These poverty rates are based on harmonized data from 18 countries, using the nearest available year of data; in the following cases data are not from 2014: Chile and Dominican Republic (2013) and Haiti (2012). 2 June 2016 Table 1. Childhood poverty in Latin America and the Caribbean (%) $2.5 a day (2005 PPP) $4.0 a day (2005 PPP) Country 2004 2014 2004 2014 Argentina 28.4 9.3 47.0 21.4 Bolivia 44.4 19.0 64.6 33.7 Brazil 38.4 14.9 58.5 32.7 Chile 12.6 3.4 30.3 11.6 Colombia 40.1 22.3 64.0 42.2 Costa Rica 8.6 21.6 Dominican Republic 37.5 21.5 60.7 46.2 Ecuador 37.8 13.5 59.6 33.0 Guatemala 41.8 46.4 63.0 70.7 Haiti 82.1 91.0 Honduras 54.6 43.9 71.5 65.3 Mexico 20.0 17.7 40.5 38.3 Nicaragua 47.3 25.9 69.7 50.3 Panama 17.5 30.0 Peru 36.3 14.7 56.4 29.8 Paraguay 29.0 14.5 51.7 28.2 El Salvador 29.2 17.6 52.3 41.9 Uruguay 20.8 5.1 20.8 15.5 LAC 33.2 36.4 53.8 36.4 Note: Tabulations of SEDLAC (CEDLAS and the World Bank), children are defined as ages 14 and under. These poverty rates are based on harmonized data from 18 countries, using the nearest available year of data. The following countries data is not from 2004: Bolivia and Nicaragua (2005), Chile (2003), and Guatemala (2006). In the following cases data are not from 2014: Chile and Dominican Republic (2013) and Haiti (2012). In order to analyze the same set of countries for the LAC total, interpolation was applied when country data were not available for a given year. Due to data limitations, Haiti is not included in the LAC total. Important socioeconomic and demographic factors are more likely to be poor simply because there are are behind the slower gains in poverty reduction more dependents per worker in the household. At the for children. In part, households with more children same time, another important consideration is that 3 June 2016 poorer households are also more likely to have more including education and healthcare – remains limited children. For instance, in 2014 households living in for children in the region. International test scores poverty had 1.7 children on average, while this show LAC countries trailing globally in quality of indicator was 0.9 for those not in poverty. Moreover, education, while also revealing significant gaps in teenage fertility is higher in the poorest quintiles of academic achievement between children of high and wealth, with negative implications for the mother’s low socioeconomic groups.4 These facts suggest that education in the short run.3 today’s childhood poverty has significant implications for tomorrow’s labor force, limiting their potential to The high levels of childhood poverty have gain the skills necessary to exit poverty as adults. To significant consequences for the future of the LAC prepare children for tomorrow’s jobs, policies need to region. While high rates of malnutrition continue to prioritize access to good quality education and basic be a challenge in countries like Haiti, Honduras and services, including nutrition, healthcare, and water. Guatemala, access to good quality services – 1Thisbrief was produced by the Latin America and Caribbean Team for Statistical Development (LAC TSD) in the Poverty and Equity Global Practice of the World Bank. The core team consisted of Leonardo Lucchetti, Eduardo Malasquez, Emma Monsalve, German Reyes, Liliana D. Sousa, and Martha Viveros. The team worked under the guidance of Oscar Calvo-Gonzalez and received valuable contributions from Andrés Castañeda, Giselle Del Carmen, Karem Edwards, Laura Moreno, Miriam Muller, Thiago Scot, Daniel Valderrama, and Martha Viveros. 2 Poverty status is calculated based on per capita daily household income. Income is adjusted for cost of living differences using income adjusted to 2005 PPP. 3 Acccording to the World Bank (2012), in Bolivia, Colombia, Dominican Republic and Peru the number of births per 1,000 women aged 15 to 19 in the lowest income quintile is between 140 and 160; while in the highest quintile is between 20 and 50. “Teena ge Pregnancy and Opportunities in Latin America and the Caribbean. On Teenage Fertility Decisions, Poverty and Economic Achievement.” 4 For example, World Bank (2014). “Social Gains in the Balance: A Fiscal Policy Challenge for Latin America and the Caribbean.” Report 85162 (February), World Bank, Washington, DC. 4 June 2016