This paper shows evidence that suggests the economic slowdown in Latin America and the Caribbean has already translated into slowing social gains, including decelerating poverty reduction, stagnating growth of the middle class, and lower income growth.
... See More + The countries of South America outperformed Mexico, Central America, and the Caribbean in poverty reduction during the decade up to 2012. But since then, a new story has emerged. In recent years, poverty reduction has been disappointing across the entire region, which seems to be converging toward low growth with slow poverty reduction and stagnant inequality. However, this apparent convergence in poverty reduction is driven by diverging labor market patterns. In a reversal of the trends seen during the commodity boom, real wages have been falling in South America and rising in Mexico, Central America, and the Caribbean. As lower economic growth is likely, the new normal will pose challenges for policy makers, in protecting the gains achieved and for societies as they face a mismatch between expectations and actual social mobility.
See Less -
Policy Research Working Paper WPS7948 JAN 19, 2017
This paper presents a new demographic profile of extreme and moderate poverty, defined as those living on less than $1.90 and between $1.90 and $3.10 per day in 2013, based on household survey data from 89 developing countries.
... See More + The face of poverty is primarily rural and young; 80 percent of the extreme poor and 75 percent of the moderate poor live in rural areas. Over 45 percent of the extreme poor are children younger than 15 years old, and nearly 60 percent of the extreme poor live in households with three or more children. Gender differences in poverty rates are muted, and there is scant evidence of gender inequality in poor children's educational attainment. A sizable share of the extreme and moderate poor, 40 and 50 percent, respectively, have completed primary school. Compared with the extreme poor, the moderate poor are significantly more likely to have completed primary school and are less likely to work in agriculture. After conditioning on other individual and household characteristics, having fewer than three children, having greater educational attainment, and living in an urban area are strongly and positively associated with economic well-being. The results reinforce the central importance of households in rural areas and those containing large numbers of children in efforts to reduce extreme poverty, and are consistent with increased educational attainment and urbanization hastening poverty reduction.
See Less -
Policy Research Working Paper WPS7844 OCT 02, 2016
This paper contributes to the methodological literature on the estimation of poverty lines for country poverty comparisons in Latin America and the Caribbean.
... See More + The paper exploits a unique, comprehensive data set of 86 up-to-date urban official extreme and moderate poverty lines across 18 countries in Latin America and the Caribbean, as well as the recent values of the national purchasing power parity conversion factors from the 2011 International Comparison Program and a set of harmonized household surveys that are part of the Socio-Economic Database for Latin America and the Caribbean project. Because of the dispersion of country-specific poverty lines, the paper concludes that the value of a regional poverty line largely depends on the selected aggregation method, which ends up having a direct impact on the estimation of regional extreme and moderate poverty headcounts.
See Less -
Policy Research Working Paper WPS7621 APR 04, 2016
The Dominican Republic has low economic mobility, with less than 2 percent of its people climbing to a higher income group during the decade, compared to an average 41 percent in the Latin America and Caribbean region as a whole.
... See More + Despite improving access to basic goods and services such as water and education, coverage and quality remain uneven, thus limiting the economic opportunities of many disadvantaged people. This reflects their inability to influence the system to their benefit, a manifestation of weak political agency. This report uses a comprehensive definition of "equity" which entails that citizens must have equal access to opportunities, be able to live in dignity, and have the autonomy and voice to participate fully in their communities and decide on life plans that they have reason to value. This report identifies three broad goals for addressing the underlying causes of economic inequity in the Dominican Republic: (1) promote equitable, efficient, and sustainable fiscal policy; (2) build fair, transparent, and efficient institutions that will improve the provision and quality of public goods and services, expand economic opportunities, increase upward mobility, and better protect economically vulnerable Dominicans; and (3) strengthen access of the poor to labor markets and increase the demand for their labor, so as to make efficient use of human capital and allow the poor to benefit from economic growth. The analysis presented in this study analyzes mobility within generations by measuring directional income movement, that is, the net upward or downward movement in individual incomes over time. Serious analytical efforts should be devoted to understanding the apparent disconnection between macro and micro data that hinders the ability of national statistics to accurately reflect macroeconomic and social progress.
See Less -
Working Paper 85760 JAN 01, 2014
Baez, Javier E.; Lopez-Calva, Luis Felipe; Castaneda, Andres; Sharman, AliDisclosed
The Dominican Republic has low economic mobility, with less than 2 percent of its people climbing to a higher income group during the decade, compared to an average 41 percent in the Latin America and Caribbean region as a whole.
... See More + Despite improving access to basic goods and services such as water and education, coverage and quality remain uneven, thus limiting the economic opportunities of many disadvantaged people. This reflects their inability to influence the system to their benefit, a manifestation of weak political agency. This report uses a comprehensive definition of "equity" which entails that citizens must have equal access to opportunities, be able to live in dignity, and have the autonomy and voice to participate fully in their communities and decide on life plans that they have reason to value. This report identifies three broad goals for addressing the underlying causes of economic inequity in the Dominican Republic: (1) promote equitable, efficient, and sustainable fiscal policy; (2) build fair, transparent, and efficient institutions that will improve the provision and quality of public goods and services, expand economic opportunities, increase upward mobility, and better protect economically vulnerable Dominicans; and (3) strengthen access of the poor to labor markets and increase the demand for their labor, so as to make efficient use of human capital and allow the poor to benefit from economic growth. The analysis presented in this study analyzes mobility within generations by measuring directional income movement, that is, the net upward or downward movement in individual incomes over time. Serious analytical efforts should be devoted to understanding the apparent disconnection between macro and micro data that hinders the ability of national statistics to accurately reflect macroeconomic and social progress.
See Less -
Working Paper 85760 JAN 01, 2014
Baez, Javier E.; Lopez-Calva, Luis Felipe; Castaneda, Andres; Sharman, AliSpanishDisclosed
The Dominican Republic has low economic mobility, with less than 2 percent of its people climbing to a higher income group during the decade, compared to an average 41 percent in the Latin America and Caribbean region as a whole.
... See More + Despite improving access to basic goods and services such as water and education, coverage and quality remain uneven, thus limiting the economic opportunities of many disadvantaged people. This reflects their inability to influence the system to their benefit, a manifestation of weak political agency. This report uses a comprehensive definition of "equity" which entails that citizens must have equal access to opportunities, be able to live in dignity, and have the autonomy and voice to participate fully in their communities and decide on life plans that they have reason to value. This report identifies three broad goals for addressing the underlying causes of economic inequity in the Dominican Republic: (1) promote equitable, efficient, and sustainable fiscal policy; (2) build fair, transparent, and efficient institutions that will improve the provision and quality of public goods and services, expand economic opportunities, increase upward mobility, and better protect economically vulnerable Dominicans; and (3) strengthen access of the poor to labor markets and increase the demand for their labor, so as to make efficient use of human capital and allow the poor to benefit from economic growth. The analysis presented in this study analyzes mobility within generations by measuring directional income movement, that is, the net upward or downward movement in individual incomes over time. Serious analytical efforts should be devoted to understanding the apparent disconnection between macro and micro data that hinders the ability of national statistics to accurately reflect macroeconomic and social progress.
See Less -
Working Paper 85760 JAN 01, 2014
Baez, Javier E.; Lopez-Calva, Luis Felipe; Castaneda, Andres; Sharman, AliEnglishDisclosed
Household income inequality has declined in Latin America in the past decades, contributing significantly to poverty reduction in the region. Although available evidence shows that changes in the labor income are among the main factors behind these inequality trends, few studies have analyzed more closely the labor market dynamics that have led to a decline in total income inequality in some countries, but also to an increase in others.
... See More + Using household survey data for a sample of 15 countries in Latin America from 1995 to 2010, this paper uses an extension of the Juhn-Murphy-Pierce methodology to decompose changes in labor income inequality (hourly wages) into a quantity effect (capturing changes in the distribution of workers' skills), price effect (reflecting returns to skills), and unobservables effect (other components, within skill groups, affecting labor income). The results show that falling returns to skills for both education and experience is, on average, driving the decline in labor income inequality in Latin America. The quantity effect, in turn, has contributed little to inequality reduction, mostly attributable to a larger dispersion in years of experience, possibly linked to the region's demographic transition and to significant increases in female labor force participation. Additional findings show that wage inequality, still high in the region, is coupled with inequality in terms of hours worked. The paper complements the existing literature by presenting separate results for males and females, as well as formal and informal sector workers as an attempt to control for secular shifts in these characteristics.
See Less -
Policy Research Working Paper WPS6384 MAR 01, 2013
