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Latin America & Caribbean

What does the end of the commodity boom mean for poverty in Latin America?

Liliana Sousa's picture
Latin America and the Caribbean (LAC) has made significant gains in poverty reduction in the 2000s - by 2013 less than a quarter of the region’s population lived on less than $4 a day and just over one in ten on less than $2.50 per day. While this implies that millions are still living in poverty, it is a big reduction from the early 2000s where more than 40 percent lived on less than $4 per day and over a quarter on less than $2.50. In the Poverty team at the World Bank, we are constantly finding that the single biggest driver of these gains has been increased labor income.

In Mexico, a rising rate of homicides has zero impact on educational outcomes. That’s good news.

Carlos Rodríguez Castelán's picture
Economists are often disappointed by research findings that show a statistically insignificant effect. This sometimes even leads researchers to stop pursuing a topic that might otherwise engage them fruitfully. This outcome thus represents a loss to social science: knowledge and insights are not put forward to be built upon.
 

How can Latin America and the Caribbean keep up inclusive growth?

Louise Cord's picture
The Latin America and Caribbean (LAC) region has been the most inclusive region in the world over the last decade: not only did it cut extreme poverty in half, it also realized the highest income growth rate among the bottom 40 percent of income earners in absolute terms, as well as relative to the total population. Between 2006 and 2011, the average growth rate per year in the mean income of LAC’s bottom 40 was approximately 5.2%. Moreover, when compared with the rest of the world, the region’s bottom 40 enjoyed the most rapid income growth relative to the total population (Figure 1).

​Are mega-trade agreements a threat to Brazil?

Otaviano Canuto's picture
The landscape of international trade negotiations has been undergoing an upheaval. On the multilateral level, after 15 years of unsuccessful attempts to close the Doha Development Round at the World Trade Organization (WTO), the negotiation system has shown to be highly vulnerable to blockades by any small group of member countries. The complex web of diverse individual country objectives, cutting across several interrelated themes, made reaching a deal harder than originally expected.

Reflections on social protection and poverty alleviation from the long term impact of Chile Solidario

Emanuela Galasso's picture
Productive inclusion is the buzzword taking shape in social policy circles in Latin America, and other middle income countries. Graduation out of social assistance does not equate with (or presume) a sustained exit from poverty.

As many middle-income countries are moving towards embracing cash transfers with or without co-responsibilities attached (and the recent hype of handing cash directly to the poor), there is an important wave of programs that provide “cash plus” intervention.

How to Reverse the Post-Crisis Slowdown of Growth in Emerging Economies?

Aristomene Varoudakis's picture
Growth in emerging economies has slowed over the past three years, something being discussed with urgency at the G20 meetings in Istanbul, Turkey. Part of the slowdown is cyclical, but a significant part reflects sluggish potential growth. Using new empirical evidence, this column argues that ambitious structural reforms can fully offset the slowdown of potential growth in emerging economies. Reforms that remove barriers to open markets and improve access to finance play a key role in revitalizing total factor productivity growth and boosting private investment.

Do Latin American Firms Invest in R&D?

Asif Islam's picture

The rewards of innovation for developing nations do not require much convincing. Poverty alleviation, faster economic growth, greater job creation, and higher worker remuneration are just some of the potential benefits. The idea of innovation as a key driver of development can be traced back to the seminal works of economists such as Joseph Schumpeter. Thus, it is no surprise that on July 30 and 31, 2013 a group of innovation leaders from 18 countries gathered in Santiago, Chile for the first pan Latin American Innovation Summit. The event was kicked off by Sebastian Piñera, then President of Chile, who had announced a national innovation budget of $1 billion. What about the private sector? An important driver of innovation is Research and Development (R & D) spending by businesses.  Evidence shows that firms that invest in R&D and other innovation-related activities have higher productivity and are more capable of making technological advances than firms that do not.  So, where do Latin American firms stand on R & D investment?

Wealth gradients in early childhood cognitive development in five Latin American countries

LTD Editors's picture

Following is an abstract from World Bank Policy research working paper no 6779 by Norbert Schady (Inter-American Development Bank), Jere Behrman (University of Pennsylvania), Maria Caridad Araujo (Inter-American Development Bank), Rodrigo Azuero (University of Pennsylvania), Raquel Bernal (Universidad de Los Andes), David Bravo (Universidad de Chile), Florencia Lopez-Boo (Inter-American Development Bank), Karen Macours (Paris School of Economics & World Bank), Daniela Marshall (University of Pennsylvania), Christina Paxson (Brown University), and Renos Vakis (World Bank).

Research from the United States shows that gaps in early cognitive and noncognitive abilities appear early in the life cycle. Little is known about this important question for developing countries. A recent World Bank owrking  paper, Wealth gradients in early childhood cognitive development in five Latin American countries,  provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, the paper uses the same measure of receptive language ability for all five countries. It finds important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where panel data to follow children over time exists, there are few substantive changes in scores once children enter school. These results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on the measure of cognitive development.

Using CCTs to Reduce Child Labor and Improve the Quality of Work that Children Perform

Ximena Del Carpio's picture

Does an increase in household wealth decrease child labor in poorer households? Available literature in economics suggests that when poorer households need to make their ends meet, they tend not to dispense on child labor. And as households’ income increases, child labor declines in favor of schooling. However, if schools are few and far, and their infrastructure and teachers’ performance are deficient, there is less incentives for parents to send their children to school. Child labor would then appear as a sensible option, not only for increasing family’s current income but also for training children in skilled work. Thus, an appropriate question is: To what extent and under what conditions an increase in household wealth can either decrease or increase child labor in poor households?

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