Inequality in Latin America: Breaking with History?

Inequality in Latin America: Breaking with History?

Inequality in Latin America: Breaking with History?

Inequality in Latin America: Breaking with History?

Synopsis

With the exception of Sub-Saharan Africa, Latin America and the Caribbean has been one of the regions of the world with the greatest inequality. 'Inequality in Latin America and the Caribbean' explores why the region suffers from such persistent inequality, identifies how it hampers development, and suggests ways to achieve greater equity in the distribution of wealth, incomes and opportunities. The study draws on data from 20 countries based on household surveys covering 3.6 million people, and reviews extensive economic, sociological and political science studies on inequality in Latin America.

Excerpt

For as long as data on living standards have been available, latin America has been one of the regions of the world with the greatest inequality. With the possible exception of Sub-Saharan Africa, this is true with regard to almost every conceivable indicator, from income and consumption expenditures to measures of political influence and voice, and including most aspects of health and education.

Whereas the richest tenth of the population in the region earn 48 percent of total income, the poorest tenth earn only 1.6 percent. By contrast, in developed countries the top tenth receive 29 percent of total income, compared to 2.5 percent for the bottom tenth. Gini coefficients tell a similar story: whereas they averaged 0.52 in Latin America in the 1990s, the averages for the oecd, Eastern Europe, and Asia during the same period were much lower: 0.34, 0.33 and 0.41, respectively.

This trend implies that very high ratios of income accrue to the wealthiest segments of the population relative to the poorest. in Guatemala, the ratio of the top to the bottom tenth of the population was 58.6 in 2000. in Panama, it declined from 71.6 in 1991 to 53.5 in 2000. Even the lowest 10/1 ratio in the region in 2000–15.8 in Uruguay—is higher than most figures found in Europe. (For example, the closest comparison is a ratio of 11.2 in Italy.)

Such enormous differences in the incomes or citizens or the same country clearly imply correspondingly different degrees of access to the goods and services that people consume in order to satisfy their needs and wants. However, disparities extend much beyond private consumption. Following the terminology of Amartya Sen, there are profound differences in the freedom, or capability, of different individuals and groups to follow lives of their choosing—to do things that they have cause to value (Sen 1985a, 1992,1999). Private resources and patterns of public provisioning affect such capabilities, while social and political arrangements affect the capacity to participate meaningfully in society, influence decision-making, or live without shame.

With respect to education, even though public systems exist in most countries in Latin America, the disparities of attainment are equally striking to those in income. in Mexico, the average person in the poorest fifth of the population has 3.5 years of schooling, as compared with 11.6 years for the average person in the richest fifth. These numbers are likely to underestimate actual educational differences because of marked differences in the quality of education. in many countries, educational attainment also differs among gender, ethnic, and racial groups. in most places, differences between men and women are becoming less marked with time and have even reversed for young cohorts, but severe disparities still exist among older people. in Bolivia, for instance, average years of schooling for persons age 61 or older are 4.1 for men and 2.4 for women.

Health outcomes also vary dramatically along with income distribution, resulting in enormous impacts on life

Note: All tables and figures referred to in the text with the designation “A” can be found in the statistical appendix, p. 285.

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