Working to end poverty in Latin America and the Caribbean : workers, jobs, and wages

The Latin America and the Caribbean (LAC) region achieved laudable gains in the 2000s in the fight against poverty. This was a decade of solid economic growth; substantial reduction in poverty and income inequality; and progress toward being a middle-class society. While changes in the distribution of household income played an important role, poverty reduction in LAC has been driven more by growth in income. To better understand these dynamics, it is useful to keep in mind the diversity of the region’s labor force by considering different skill groups, as defined by education levels. With the commodity boom fading, the region will do well to redouble internal efforts to promote more inclusive growth and to reduce poverty. This report highlights the need to ease the constraints that the poor face in labor market participation and to continue improving their access to high-quality education. While labor market policies like the minimum wage can be useful tools, care must be taken to apply them judiciously. Moreover, finding the best ways to stoke productivity, which will allow workers to make structural shifts to better jobs, will be an important challenge going forward for sustained inclusive growth and shared prosperity.