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New laws dramatically boosted minimum wages in several countries, including Brazil and Argentina. Redistributive policies like conditional cash transfers also played a role. But in terms of falling wage inequality, these factors were secondary to growth and rising education.

Those are among key findings of a new World Bank report, Working to End Poverty in Latin America and the Caribbean: Workers, Jobs, and Wages, released today at the Council of the Americas. The report, part of the Poverty and Labor Brief series, also provides the latest poverty and income inequality numbers for the region using comparable household and labor force surveys.

The latest estimates indicate that regional GDP rose by 6.7 percent in 2021, exceeding previous forecasts. Nevertheless, the road ahead presents significant obstacles. The biggest challenge will be to strengthen the recovery and ensure that growth benefits those who need it most.

English. Latin America and the Caribbean (LAC) has made significant gains in poverty reduction in the 2000s - by 2013 less than a quarter of the region’s population lived on less than $4 a day and just over one in ten on less than $2.50 per day. While this implies that millions are still living in poverty, it is a big reduction from the early 2000s where more than 40 percent lived on less than $4 per day and over a quarter on less than $2.50.

A: Real exchange rate appreciation triggered by the commodity boom and other forces reduced wage inequality across firms for workers with similar skills, because (i) it favored non-tradable sectors (such as construction, transportation, tourism) where wage inequality across firms is lower and (ii) compressed wages in the tradable sector (such as agriculture or manufacturing) by limiting growth of high-paying exporting firms. Moving forward, education is likely to continue to expand, fueling ...

Last year’s report Indigenous Latin America in the Twenty-First Century is a call for us to begin thinking about the indigenous population in terms of its diversity. The development models and analytical tools we use today to address their needs and demands do not incorporate the reality that half of the indigenous peoples of the region lives in urban environments, or the fact that there are multiple, overlapping dimensions of exclusion.

But in the earlier sub-period of 1995-2002, when labor demand was not growing as fast, minimum wage growth was accompanied by falling compliance, with an increase in the number of workers earning less than the minimum wage of a full six percentage points of the labor force.

Our analysis shows that compliance is affected by both the level at which minimum wages are set relative to average wages, as well as by institutional factors. Looking at the level, Figure 1 shows for a sample of countries that when minimum wages are very low, only a few workers will be paid less than the minimum, as in the case of Mexico and Viet Nam.

In recent years, the minimum wage has become an increasingly popular for reducing inequality in many emerging markets, while others are still weighing whether to adopt one. But a lot of confusion still surrounds the impact of minimum wages in advanced economies, let alone in the emerging markets.

“More than $20,000 per job,” he said, comparing it to much lower numbers (between $500 and $3,000 per job) usually associated with active labor market programs such as training, job search assistance, wage subsidies, or public works.