In the Caribbean, the data needed to monitor poverty are scarce. Over the past ten years, most Caribbean countries have either produced just one poverty estimate or none at all. According to the World Bank's Statistical Performance Indicators (SPI), the Caribbean subregion has the lowest statistical performance of any region and is at the same level as low-income countries. This data deficit hinders effectively tracking progress against Sustainable Development Goal 1 (eradicating poverty in all its forms) as well as the design of poverty-reducing policies.
Recently, the World Bank produced poverty and inequality estimates for four Caribbean countries – Grenada, Jamaica, Saint Lucia, and Suriname – based on the latest living conditions and household budget surveys. Efforts are underway to include other Caribbean countries in this initiative. While international comparisons of such estimates need to be interpreted with some caution, as some are based on household consumption and others on household income, they help us understand the profile of poverty in the Caribbean.
Figure 1: Poverty headcount rate at $6.85 per capita a day (2017 PPP) - upper-middle income countries
Source: World Bank Poverty and Inequality Platform. Note: Poverty headcounts are based on harmonized welfare aggregates constructed either by adding up all household income sources or the monetary value of their consumption, depending on the information available for each country. Chart shows the headcount rates for upper middle-income countries, using the latest available data collected between 2015 to 2022.
Five facts about poverty and inequality in the Caribbean
Fact 1: Poverty levels vary significantly across Caribbean countries. When applying the upper middle-income poverty line of US$6.85 per person a day (adjusted for 2017 PPP), Suriname had the highest poverty rate, with nearly one in five people (18 percent) living in poverty in 2022. Saint Lucia had the lowest rate, with less than one in ten (8 percent) of its residents living in poverty in 2015. In both Grenada and Jamaica, around 14 percent of people lived in poverty in 2018 and 2021 respectively. Compared to other middle-income countries, poverty rates in the Caribbean are generally moderate (see Figure 1).
Fact 2: National averages mask significant variation. Children are especially vulnerable. In Suriname, 26 percent of children aged 14 or less live in poverty, compared with 23 percent in Grenada, 20 percent in Jamaica, and 14 percent in Saint Lucia. People living in households with less-educated heads face higher poverty rates: poverty is 3 to 10 times more prevalent for people in households where the head has only primary education or less compared to those where the head has tertiary education. Women are also more likely to experience poverty than men.
Fact 3: Poor people in the Caribbean tend to live in larger households with higher dependency ratios. High dependency ratios mean that there are fewer working-age people to support dependents (children and the elderly). Jamaica and Grenada have some of the highest dependency rates in the Caribbean. Overall, poor households in the subregion have one to two more dependents per working-age adult compared to non-poor households.
Fact 4: Employment rates are notably lower among the poor. On average, only about 40 percent of the poor population aged 15 and older are employed, which is 18 percentage points lower than their non-poor counterparts.
Fact 5: There is significant inequality in monetary welfare across the Caribbean. The Gini index, the most widely used metric to measure inequality globally, reveals that inequality is high in the Caribbean compared to other upper-middle income countries. The Gini index for Caribbean countries lies close to or above the World Bank threshold of 40 Gini points for high inequality countries.
Investing in reliable and timely data to address poverty
Collecting data on poverty and inequality regularly is crucial for designing effective policies to address poverty. In broad terms, the policy approaches that contribute to poverty reduction are well known. They comprise, for instance, macro-fiscal policies that bolster economic growth, labor market policies that make poor and vulnerable workers more employable, effective social safety nets, and investment in education to underpin economic growth and employability in the longer term. Data on poverty and inequality can help to make the design of these policies more concrete.
Designing poverty-reducing policies can be enhanced by combining data on poverty and inequality with information on topics such as economic growth, education, labor markets, and social assistance. Suriname’s recent Poverty Assessment – produced by the Inter-American Development Bank and the World Bank – highlights how poverty and inequality intersect with labor market disparities, skill shortages, patterns of ethnic and geographic inequality, and limitations in the delivery of social assistance. The report provides actionable policy recommendations based on the results.
To give an example, it shows that the Suriname’s foremost social assistance programs mostly target specific demographic groups and, as a result, fail to adequately support a sizeable portion of the poor as well as historically marginalized groups. Building on the Government of Suriname’s substantial efforts to bolster social assistance in the aftermath of the country’s recent macro-fiscal crisis, there are evidence-informed opportunities to better reach these groups, improve the efficiency and effectiveness of social assistance programs, and reduce poverty.
The World Bank continues to prioritize the generation of reliable and timely evidence to harness poverty reduction. Follow the Poverty and Inequality Platform to stay up to date with the latest developments.
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