ESCAPING THE POVERTY TRAP IN LATIN AMERICA: THE ROLE OF FAMILY FACTORS

Abstract

Much like an inherited trait, trends to pass from parent to child. How prevalent is this curse of the poor, why do some escape it, and how can we help improve the odds? This study sets out to gauge the extent of this Intergenerational transmission of poverty (ITP) in 16 Latin American countries, analyze certain affecting it, and raise policy considerations. Among the various a priori determinants of ITP, the study focuses o­n factors - those more closely related to characteristics of the household, such as mother?s schooling, than to its economic and social environment. The empirical results indicate that the prevalence of ITP in Latin America is strong and that family play an important role in the educational achievement of poor children - and hence o­n their expected lifetime income. Regressions for 16 Latin American countries show that children in with fewer siblings, more educated parents, higher household income, and living in urban areas are significantly more likely to complete secondary education. Completion of secondary education is taken as the threshold level of schooling at or above which a child of should have a fair chance of escaping the cycle in the 21st century. Results for the subset of countries with the required data further show that children of the poor born to single adolescent mothers, or who did not attend a preschool program, or were undernourished, are less likely to complete secondary education than children of the poor without the corresponding attributes. Moreover, supplementary data reviewed for this study, but that could not be adequately indexed for the regressions, tend to support findings by other researchers pointing to two additional family affecting educational performance among children from poor households: domestic violence and ethnicity. Study results suggest that poverty-reduction strategies take into account family much more than is commonly the case, especially in complement to the supply of education and other basic social services that are so greatly emphasized today. As corollary, we recommend that such social services should, whenever possible, focus o­n the undereducated households in poverty, rather than o­n their members individually, to improve their children?s education outcomes and thereby increase their chances of breaking out of the cycle of intergenerational poverty.