Poverty and Income Distribution in Latin America: The Story of the 1980s

This report presents the findings of a regional study on poverty and income distribution in Latin America and the Caribbean. The study was undertaken because of the significance of these issues and the paucity of statistical information on recent trends in the region. Moreover, the impact that the economic recession of the 1980s had on the poor needed to be assessed, particularly in light of reduced spending per capita on public social programs. The analysis points to 3 principal conclusions: 1) on average, poverty increased and income distribution worsened; 2) there is a strong evidence that both income inequality and poverty mirrored the economic cycle, rising during recession and falling during recovery; and 3) educational attainment has the greatest correlation with both income inequality and the probability of being poor. Prospects for long-run growth, and hence for poverty reduction, are significantly brighter for countries that implemented reforms designed to promote a stable and sustainable macroeconomic framework. Chapter 2 of the report reviews the distribution of per capita household income. Chapter 3 discusses the decomposition of workers' income inequality and chapter 4 absolute poverty. Finally, chapter 5 analyzes social indicators such as health, education, and demographic and employment indicators.