Two young men review documents on the University of Haiti campus in Port-au-Prince. CHARLES TRAINOR JR (Getty Images)
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A decade ago, Craig Froehle, a professor at the University of Cincinnati, designed an illustration showing the differences between equality and equality. In the first scenario, three children of different sizes stand on a box of the same size to watch a baseball game. In the following image depicting justice, each young man is on a step appropriate to his height so that all three have the same view. In Latin America and the Caribbean, the world’s most unequal region, this support is virtually non-existent and the consequences of inequality are passed on from generation to generation. According to the latest Economy and Development Report (Red 2022) from the CAF Development Bank of Latin America, only 12% of the children of parents with little or no education complete university. It is still difficult for the new generations to see the game.
The study, titled Inherited Inequalities: The Role of Skills, Employment and Wealth in the Opportunities of the New Generations, released this Monday in Montevideo, Uruguay, compares access to education, the labor market and wealth creation across generations in Latin America Beginning of the 20th century to the present and examines the “low” social mobility of the continent. “Closing this gap has implications on many levels beyond social justice, it has implications for economic growth and political-institutional stability,” explains Dolores de la Matta, co-author of the publication and chief economist at Coffee’s Socio-Economic Research Directorate.
The term social mobility refers to the movements of people within a given socio-economic system. That this indicator is low implies that the bubbles between different social groups are becoming increasingly shielded. In other words, it will be very rare that the weakest will emerge from their cycle of poverty and that, on the contrary, the rich will retain their privileges.
Although education indicators are improving, progress is slow. About 80% of those born in the first decades of the 20th century did not complete primary school. At the end of the century, this percentage fell by only 5%. In contrast, half of those born in the 1990s did not complete high school. And, much further away, the university; where the gaps are deepest.
“And even when these people attain higher levels of education,” laments Lucila Berniell, co-author of the publication and chief economist in CAF’s socio-economic research department, “they don’t translate into job promotions or better job opportunities.” The report suggests that this may be due to the fact that educational progress has not been sufficient and that the economic structure does not reward higher levels of education. “Although it can be unfair to compare countries and that is not the intention of the study, there are some nations that are very good at closing the gap, such as Bolivia, Chile and Peru. However, Argentina and Uruguay, for example, are facing greater stagnation.”
This reality is much more complicated for Afro descendants, Indigenous peoples, and women from more vulnerable environments, and the multiple causes stretch back to colonial times. The geographical location of the parents also determines the children’s chances of earning a living. Almost half (45%) of the new generations live in the same neighborhood as their parents. One in three Latin Americans surveyed by the organization actually lives in the same house. And it is that job opportunities are far removed from one city to another. Also between districts. The wage gap in urban and rural areas is around 40% or more. In addition, their formality is usually condensed in certain places.
For this reason, Berniell emphasizes the revolutionary nature of transport: “The very high rate of urbanization in the region implies a great potential for policies to equalize employment opportunities between neighborhoods. This basically implies investment in local public transport, which shortens the distance to the workplace.” And he adds: “The figures are very reliable. An Afro person on the continent has only half as many job opportunities as a white person. And here only one in three Latin Americans describes themselves as white. It is a critical situation that is only marked by the color of the skin.”
Mobility in employment is even more persistent. 30% of the children surveyed belong to the same professional group as their parents. “One in five workers had a family member who helped them get their current job,” says De la Matta. And one in ten works in the same company where their father works or worked. “It’s obvious that the weaker that network of influences and contacts, the less chance they have of finding work,” he adds.
It’s no secret that wealth is concentrated in the few. In fact, according to the World Inequality Report, the region’s richest 10% own 77% of wealth, while the poorest 50% own just 1%. For both researchers, however, this is another key point of the study. And one of the biggest stones in the vulnerable population’s shoe. “This situation means that the impoverished population cannot withstand natural disasters or macroeconomic shocks such as inflation or health,” explains De la Matta.
For this reason, both authors advocate policies that reverse the situation, as measures of acquisition, ownership and quality of housing, financial inclusion in households, and progressive and well-designed inheritances and transfers in life. “Only in this way,” says Berniell, “can the high correlation between financial practices from one generation to the next be broken.”