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Publication(Washington, DC, 2023-05-11) World BankLatin America and the Caribbean (LAC) have faced extraordinary challenges over the last three years that reverted the social gains of the previous two decades. The COVID-19 pandemic resulted in severe health impacts and a reversal in many of its socioeconomic gains. The unprecedented disruption to education and health during the COVID-19 pandemic will leave lasting scars on human capital accumulation and the welfare of an entire LAC generation. A year after the onset of COVID-19, the region is bouncing back, yet not sufficiently fast to put the worst effects of the pandemic behind it. Despite the challenges ahead, the LAC region has the potential to overcome them in its traditional areas of comparative advantage and the opportunities arising from resilient green growth. It needs to take advantage of its comparative advantage in the green economy. The transition to the green economy can be an opportunity to improve well-being in the region by creating new quality jobs, enhancing labor incomes, and contributing to poverty reduction.
On the Edge of Uncertainty: Poverty Reduction in Latin America and the Caribbean during the Great Recession and Beyond(World Bank, Washington, DC, 2011-12) World BankStrong poverty reduction in Latin America resumed with the growth rebound in 2010, as both moderate and extreme poor households benefitted from the recovery, accelerating poverty reduction to rates similar to those witnessed between 2003-2006 despite a 2.8 percent decline in Gross Domestic Product (GDP) per capita in Purchasing Power Parity (PPP) terms, poverty levels in Latin America (LAC) remained basically static during the great recession, as the poor were shielded from the economic crisis in some countries and continued to benefit from growth in others. In 2010, poverty reduction resumed sharply in Latin America, as household incomes were once again closely linked to economic growth at rates similar to pre-crisis years. Moderate poverty declined by almost 2.5 percentage points to reach 28 percent in 2010, while extreme poverty fell by more than 2 percentage points to reach 14 percent. As 2011 comes to a close, once again the global economy and Latin America are facing risks of yet another economic slowdown. Using household survey data from 2010 and selected labor market indicators through the third quarter of 2011, this note identifies some basic facts on the impact of the crisis and the recovery on the poor and explores their implications for poverty reduction in the region going forward.
Publication(World Bank, 2011-04) World BankIn 2004 the World Bank released a regional report titled 'Inequality in Latin America: Breaking with History?' Analyzing data from the early 1990s to the early 2000s, a period in which many countries in the region were experiencing increasing inequality, this study raised the question of whether Latin America could reverse its historical pattern of high and persistent inequality. The report concluded that although not easy, breaking with history was more than ever possible in the region. An additional decade of data presented in this brief shows that it was possible, mainly due to changes in labor markets (including a reduction in educational inequality and the skill premia, and greater female labor force participation), a higher incidence of government transfers, and additional factors such as demographic changes. The decrease in inequality is driven mostly by improvements in labor income, particularly a reduction in skill premiums, reflecting improved access to education as well as other factors. In contrast to the recent Latin American trends, Asia is witnessing rising inequality, pushed up by China and India - where income has traditionally been more equal. However, inequality remains very high in Latin America, with levels significantly above other middle income countries. As Latin America enters a new decade, it does so knowing that inequality reduction is possible in the region.