IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v60y2014icp132-146.html
   My bibliography  Save this article

The Strugglers: The New Poor in Latin America?

Author

Listed:
  • Birdsall, Nancy
  • Lustig, Nora
  • Meyer, Christian J.

Abstract

We identify a group of people in Latin America that are not poor but not middle class either—namely “strugglers” in households with daily income per capita between $4 and $10 (at constant 2005 PPP). This group will account for about a third of the region’s population over the next decades; as the size and income of the middle class rises, they could become increasingly marginalized. The cash transfers they receive are largely offset by indirect taxes; the benefit of schooling and other in-kind transfers they receive is questionable after adjusting for quality. We discuss implications for the social contract.

Suggested Citation

  • Birdsall, Nancy & Lustig, Nora & Meyer, Christian J., 2014. "The Strugglers: The New Poor in Latin America?," World Development, Elsevier, vol. 60(C), pages 132-146.
  • Handle: RePEc:eee:wdevel:v:60:y:2014:i:c:p:132-146
    DOI: 10.1016/j.worlddev.2014.03.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X14000850
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2014.03.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anand, Sudhir & Kanbur, S. M. Ravi, 1991. "International poverty projections," Policy Research Working Paper Series 617, The World Bank.
    2. Ahluwalia, Montek S. & Carter, Nicholas G. & Chenery, Hollis B., 1979. "Growth and poverty in developing countries," Journal of Development Economics, Elsevier, vol. 6(3), pages 299-341, August.
    3. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
    4. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    5. Lustig, Nora & Gray Molina, George & Higgins, Sean & Jaramillo, Miguel & Jiménez, Wilson & Paz, Verónica & Pereira, Claudiney & Pessino, Carola & Scott, John & Yáñez, Ernesto, 2012. "The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico and Peru: a synthesis of results," Research Department working papers 234, CAF Development Bank Of Latinamerica.
    6. Thomas Piketty, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 551-584.
    7. Jere R. Behrman & Alejandro Gaviria & Miguel Székely, 2001. "Intergenerational Mobility in Latin America," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2001), pages 1-44, August.
    8. Nora Lustig, 2000. "Crises and the Poor: Socially Responsible Macroeconomics," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2000), pages 1-30, August.
    9. Branko Milanovic & Shlomo Yitzhak, 2006. "Decomposing World Income Distribution: Does The World Have A Middle Class?," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 2(2), pages 88-110.
    10. Luis López-Calva & Eduardo Ortiz-Juarez, 2014. "A vulnerability approach to the definition of the middle class," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 23-47, March.
    11. MacLeod, W. Bentley & Urquiola, Miguel, 2012. "Anti-Lemons: School Reputation, Relative Diversity, and Educational Quality," IZA Discussion Papers 6805, Institute of Labor Economics (IZA).
    12. Abhijit V. Banerjee & Esther Duflo, 2008. "What Is Middle Class about the Middle Classes around the World?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 3-28, Spring.
    13. Anonymous, 2014. "Introduction to the Issue," Journal of Wine Economics, Cambridge University Press, vol. 9(1), pages 1-2, May.
    14. Sabina Alkire & James Foster, 2011. "Understandings and misunderstandings of multidimensional poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 289-314, June.
    15. Goñi, Edwin & Humberto López, J. & Servén, Luis, 2011. "Fiscal Redistribution and Income Inequality in Latin America," World Development, Elsevier, vol. 39(9), pages 1558-1569, September.
    16. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    17. Gasparini Leonardo & Leonardo Tornaroli, 2009. "Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    18. Nancy Birdsall & Nora Lustig & Darryl McLeod, 2011. "Declining Inequality in Latin America: Some Economics, Some Politics," Working Papers 1120, Tulane University, Department of Economics.
    19. Stefan Dercon & Joseph S. Shapiro, 2007. "Moving On, Staying Behind, Getting Lost: Lessons on poverty mobility from longitudinal data," Economics Series Working Papers GPRG-WPS-075, University of Oxford, Department of Economics.
    20. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2009. "Dollar a Day Revisited," The World Bank Economic Review, World Bank Group, vol. 23(2), pages 163-184, June.
    21. Nancy Birdsall & Christian J. Meyer, 2015. "The Median is the Message: A Good Enough Measure of Material Wellbeing and Shared Development Progress," Global Policy, London School of Economics and Political Science, vol. 6(4), pages 343-357, November.
    22. Santiago Levy & Norbert Schady, 2013. "Latin America's Social Policy Challenge: Education, Social Insurance, Redistribution," Journal of Economic Perspectives, American Economic Association, vol. 27(2), pages 193-218, Spring.
    23. Patrick J. McEwan & Miguel Urquiola & Emiliana Vegas, 2008. "School Choice, Stratification and Information on School Performance: Lessons from Chile," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-42, January.
    24. Nora Lustig & Carola Pessino & John Scott, 2014. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue," Public Finance Review, , vol. 42(3), pages 287-303, May.
    25. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    26. Giovanni Andrea Cornia & Bruno Martorano, 2012. "Development Policies and Income Inequality in Selected Developing Regions, 1980–2010," UNCTAD Discussion Papers 210, United Nations Conference on Trade and Development.
    27. Anonymous, 2014. "Introduction to the Issue," Journal of Wine Economics, Cambridge University Press, vol. 9(2), pages 109-110, August.
    28. Nora Lustig & Carola Pessino & John Scott, 2013. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview," Working Papers 1313, Tulane University, Department of Economics.
    29. Nancy Birdsall, 2012. "A Note on the Middle Class in Latin America," Working Papers 303, Center for Global Development.
    30. Ravallion, Martin, 2012. "Benchmarking global poverty reduction," Policy Research Working Paper Series 6205, The World Bank.
    31. Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
    32. Nancy Birdsall, 2010. "The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest," Working Papers 207, Center for Global Development.
    33. Ocampo, Jose Antonio & Ros, Jaime (ed.), 2011. "The Oxford Handbook of Latin American Economics," OUP Catalogue, Oxford University Press, number 9780199571048, Decembrie.
    34. Nancy Birdsall, Nora Lustig, and Darryl McLeod, 2011. "Declining Inequality in Latin America: Some Economics, Some Politics - Working Paper 251," Working Papers 251, Center for Global Development.
    35. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730, December.
    36. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers 337, Center for Global Development.
    37. José De Gregorio, 2014. "How Latin America Weathered the Global Financial Crisis," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6789, October.
    38. Milanovic, Branko & Yitzhaki, Shlomo, 2002. "Decomposing World Income Distribution: Does the World Have a Middle Class?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 155-178, June.
    39. Jere R. Behrman & Alejandro Gaviria & Miguel Székely, 2001. "Intergenerational Mobility in Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2001), pages 1-44, August.
    40. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," The World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
    41. Homi Kharas, 2010. "The Emerging Middle Class in Developing Countries," OECD Development Centre Working Papers 285, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers 337, Center for Global Development.
    2. Andy Sumner, 2012. "The Buoyant Billions: How “Middle Class†Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)," Working Papers id:5169, eSocialSciences.
    3. Andy Sumner, 2012. "The Buoyant Billions: How “Middle Class” Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)," Working Papers 309, Center for Global Development.
    4. Bird, Richard M. & Zolt, Eric M., 2015. "Fiscal Contracting in Latin America," World Development, Elsevier, vol. 67(C), pages 323-335.
    5. Peter Edward & Andy Sumner, 2014. "The Poor, the Prosperous and the ‘Inbetweeners’: A Fresh Perspective on Global Society, Inequality and Growth," Working Papers 122, International Policy Centre for Inclusive Growth.
    6. Mariam Shahzadi & Muhammad Faraz Riaz & Sofia Anwar & Samia Nasreen, 2017. "How unequal is the size of middle class in the rural urban areas of Punjab province," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(2), pages 253-266, February.
    7. Nancy Birdsall, 2012. "A Note on the Middle Class in Latin America," Working Papers 303, Center for Global Development.
    8. Rogelio Madrueño-Aguilar, 2017. "Global Income Distribution and the Middle-Income Strata: Implications for the World Development Taxonomy Debate," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 1-18, January.
    9. Higgins, Sean & Lustig, Nora, 2016. "Can a poverty-reducing and progressive tax and transfer system hurt the poor?," Journal of Development Economics, Elsevier, vol. 122(C), pages 63-75.
    10. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 1301, Tulane University, Department of Economics.
    11. Cabrera, Maynor & Lustig, Nora & Morán, Hilcías E., 2015. "Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala," World Development, Elsevier, vol. 76(C), pages 263-279.
    12. Reham Rizk & Ricardo Nogales, 2017. "Revisiting the Middle-Class Myth: Evidence From A Cross-Country Analysis of African Social Progress," Working Papers 1139, Economic Research Forum, revised 09 2003.
    13. Loayza, Norman & Rigolini, Jamele & Llorente, Gonzalo, 2012. "Do middle classes bring about institutional reforms?," Economics Letters, Elsevier, vol. 116(3), pages 440-444.
    14. Arjun Jayadev & Rahul Lahoti & Sanjay Reddy, 2015. "The Middle Muddle: Conceptualizing and Measuring the Global Middle Class," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 193, Courant Research Centre PEG.
    15. Natalie Chun & Rana Hasan & Muhammad Habibur Rahman & Mehmet Ali Ulubaşoğlu, 2017. "The Role of Middle Class in Economic Development: What Do Cross-Country Data Show?," Review of Development Economics, Wiley Blackwell, vol. 21(2), pages 404-424, May.
    16. Bergolo, M. & Cruces, G., 2021. "The anatomy of behavioral responses to social assistance when informal employment is high," Journal of Public Economics, Elsevier, vol. 193(C).
    17. repec:ilo:ilowps:485512 is not listed on IDEAS
    18. Tsiry ANDRIANAMPIARIVO, 2014. "Moderate Prosperity, an adaptation of the Middle Class concept to a Malagasy rural area: the case of Itasy," Cahiers du GREThA (2007-2019) 2014-20, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    19. Reyes-Hernández, Miguel Santiago & Cerón-Vargas, José Arturo & López-López, Miguel & miguel.lpz.lpz@gmail.com, 2016. "México: un país que no se mueve. Un análisis de movilidad social a partir de un enfoque de clases./ Mexico: a country that does not move. An analysis of social mobility from of a class approach," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 12(23), pages 87-122, Segundo s.
    20. Ravallion, Martin & Chen, Shaohua, 2015. "Benefit incidence with incentive effects, measurement errors and latent heterogeneity: A case study for China," Journal of Public Economics, Elsevier, vol. 128(C), pages 124-132.
    21. Edward, Peter & Sumner, Andy, 2014. "Estimating the Scale and Geography of Global Poverty Now and in the Future: How Much Difference Do Method and Assumptions Make?," World Development, Elsevier, vol. 58(C), pages 67-82.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:60:y:2014:i:c:p:132-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.