Why are Indigenous Peoples more likely to be poor?


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Indigenous Peoples face poverty rates that are on average twice as high as for the rest of Latin Americans. This fact is probably not a surprise to most readers of this blog. More intriguing, however, are three additional findings from recent work on the topic.

First, until recently, we did not have as robust quantitative evidence of such poverty gaps as that found in the recent World Bank report Indigenous Latin America in the Twenty-First Century. In fact, not all countries in the region have data on poverty by ethnicity and fewer still have the micro-data needed to understand the stumbling blocks that Indigenous Peoples face on the path out of poverty.

Second, the gap between the poverty rate of Indigenous Peoples and the rest of the population is not getting smaller. In some countries the gap remains stagnant and in others it is actually widening. Why are Indigenous Peoples benefiting less from growth and more likely to be poor? One way to explore these issues is to disentangle how much of the poverty gap between Indigenous and non-Indigenous populations can be explained by factors such as that indigenous peoples tend to live in rural areas, have lower education, etc. The results of such analysis bring us to my final point, illustrated in the chart below.

Source: SEDLAC (World Bank and CEDLAS). Note: the bars represent the percentage of people living on less than US$4 per day 2005 PPP for indigenous peoples and the rest of the population. The poverty rates are calculated using late-2000s weighted average for Bolivia, Ecuador, Guatemala, Mexico and Peru.
*Variables include characteristics of the head of the household (education, age, and gender), family composition (number of non-working members), geographical characteristics (country of residence, rural status) and employment characteristics of the head (sector of employment and occupation).

Third, even after we take into account demographic and economic differences between Indigenous Peoples and the rest of the population – for example, the likelihood of living in rural areas and educational attainment – Indigenous Peoples are still more likely to be poor. When we take a close look at the five countries for which we have the most detailed data (Bolivia, Ecuador, Guatemala, Mexico and Peru) and perform such analysis, we find something remarkable.

Only about half the gap in poverty rates between Indigenous and non-Indigenous Peoples can be accounted for by differences in characteristics like the level of education of the head of the household, the sector of employment, residence in urban or rural areas, or the number of dependents in the family. This leaves a very large 'unexplained' gap. How can this be? One reason is that even if an Indigenous person completes a given level of education, his or her earnings are often much lower than those of a non-Indigenous person with the same level of education. These results suggest that Indigenous Peoples face specific challenges in benefiting from growth and getting out of poverty.

Note: This blog is part of the 'lacfeaturegraph' monthly series from the LAC Equity Lab team. To look at past posts, please visit here.


Oscar Calvo-González

Practice Manager, Poverty

Mohamed O. Msekeni
February 17, 2016

"Why Indigenous Peoples are more likely to be poor?".
Despite of lack of robust quantitative evidence and different observations. Some findings have come out now that mostly globally 50% of indigenous people are to be living in urban areas. Other findings reveals that indigenous people still likely to live in rural areas.
With these two different opinions on findings the basis of root cause for poverty among indigenous people comes on the three aspects below;
They are neglected to their greater countries societies and entirely dis connected away from globe Society.
(1.)#EDUCATION#: This dis connection gives them disadvantage to lack of access to education, skills and knowledge. Poverty strike them on ignorance.
(2.)#ECONOMIC#: This dis connection deny them opportunity to Wealth creation through production and trade. They remain on subsistence mode of Economic life through Skavengering Api culture and so on. They are not integrated to their particular Economic system of their countries and globe economic production and trade.
(3.)#GOVERNMENT#: This dis connection denies them recognition of their culture, voice and identity. They are not properly integrated to Government systems of their countries as well global integrated government system.
Due to these three reasons above here comes why global indigenenous people they are not benefiting from prosperity and growth.

September 10, 2019

I did similar research in Nigeria (Masters in social work project work ) and the study reveals their lifestyle, subjective reality, values, and orientation as part of the unexplained differences between the indigenous and non-indigenous people.
Two social theories that explain our findings were Social interaction and social learning.

Adria Armbrister
March 10, 2020

I just wrote a post on LinkedIn about active and completely conscious discrimination against Indigenous professional candidates for technical positions in international organizations that serve Latin America. This discrimination questions the intellectual capacity of indigenous peoples who have PhDs from illustrious schools to carry out work that is beneath their level of education. If racism isn't counted as one of the "mysterious" unknowns in who indigenous peoples are in poverty, any future study is sorely missing the mark.