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The Urban Poor in Latin America


  • Marianne Fay


With three quarters of its population living in cities, Latin America is now essentially an urban region. Higher urbanization is usually associated with a number of positives, such as higher income, greater access to services, and lower poverty incidence, and, Latin America is no exception. Today, urban poverty incidence, at 28 percent, is half that of in rural areas; extreme poverty, at 12 percent, is a third. Despite this relatively low poverty incidence, the absolute number of poor people is high, and most studies agree that about half of Latin America's poor live in urban areas. The Bank's own estimates suggest that 60 percent of the poor (113 million people) and half the extreme poor (46 million individuals) live in urban areas. The report reviews what is specifically urban about poor people living in cities, which reveals a number of facts, critical to understanding the challenges facing the urban poor, and the means to address these challenges. Three preconceived ideas are discussed, that tend to cloud judgment about urban poverty. All three spring from the common misperception that urban statistics are representative of the urban poor. However, the relatively low incidence of poverty in cities, combined with Latin America's high inequality, imply urban statistics are almost never representative of the urban poor. Concerning the differences between urban and rural poor, the need for differentiated strategies to tackle urban as opposed to rural poverty is implied, and, the first and most important differential is the greater integration of the urban poor into the market economy. Second, while urban areas are not systematically unequal than rural areas - it depends on the country, and, within countries, on the city - they are much more heterogeneous socio-economically, or with respect to economic activities and processes. Third, heterogeneity notwithstanding, Latin American cities tend to be highly segregated. As a result, social exclusion coexists with (relative) physical proximity to wealth, services and opportunities. This gives rise to negative externalities, or neighborhood effects that result in a lower ability to access jobs, lower earnings, and lower educational achievements. Fourth, social networks are less stable in urban areas, with relationships based more on the quality of reciprocal links between individuals and friends, than on familial obligations. Fifth, urban living also means much greater exposure to organized crime, drugs and gang violence. This is true for the population as a whole, but it has particularly dismal implications for the poor living in the slums of Latin America's large cities, where drug-traffic is now pervasive. Finally, another important characteristic of urban poverty has to do with overwhelmed, rather than absent services. The underlying hypothesis of this report is that, indeed, the causes of poverty, the nature of deprivation, and the policy levers to fight poverty are, to a large extent, site specific.

Suggested Citation

  • Marianne Fay, 2005. "The Urban Poor in Latin America," World Bank Publications, The World Bank, number 7263, June.
  • Handle: RePEc:wbk:wbpubs:7263

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    References listed on IDEAS

    1. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications, The World Bank, number 14902, June.
    2. Ruel, Marie T. & de la Briere, Benedicte & Hallman, Kelly & Quisumbing, Agnes R. & Coj, Nora, 2002. "Does subsidized childcare help poor working women in urban areas?," FCND briefs 131, International Food Policy Research Institute (IFPRI).
    3. Beatrice Lorge Rogers & Jennifer Coates, 2002. "Food-Based Safety Nets and Related Programs," Working Papers in Food Policy and Nutrition 12, Friedman School of Nutrition Science and Policy.
    4. Emanuela Galasso & Martin Ravallion, 2004. "Social Protection in a Crisis: Argentina's Plan Jefes y Jefas," World Bank Economic Review, World Bank Group, vol. 18(3), pages 367-399.
    5. Lorge Rogers, Beatrice & Coates, Jennifer, 2002. "Food-based safety nets and related programs," Social Protection and Labor Policy and Technical Notes 29735, The World Bank.
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    Cited by:

    1. Jarillo, Brenda & Magaloni, Beatriz & Franco, Edgar & Robles, Gustavo, 2016. "How the Mexican drug war affects kids and schools? Evidence on effects and mechanisms," International Journal of Educational Development, Elsevier, vol. 51(C), pages 135-146.
    2. Eduardo Rojas & Nadin Medellín, 2011. "Housing Policy Matters for the Poor: Housing Conditions in Latin America and the Caribbean, 1995-2006," IDB Publications (Working Papers) 3817, Inter-American Development Bank.
    3. Narloch, Ulf & Bangalore, Mook, 2018. "The multifaceted relationship between environmental risks and poverty: new insights from Vietnam," LSE Research Online Documents on Economics 87553, London School of Economics and Political Science, LSE Library.
    4. Avner,Paolo & Mehndiratta,Shomik Raj & Viguie,Vincent & Hallegatte,Stephane, 2017. "Buses, houses or cash ? socio-economic, spatial and environmental consequences of reforming public transport subsidies in Buenos Aires," Policy Research Working Paper Series 8166, The World Bank.
    5. World Bank, 2008. "Republic of Haiti - Public Expenditure Management and Financial Accountability Review (PEMFAR) : Improving Efficiency of the Fiscal System and Investing in Public Capital to Accelerate Growth and Redu," World Bank Other Operational Studies 7998, The World Bank.
    6. Torche, Florencia & Spilerman, Seymour, 2006. "Household Wealth in Latin America," WIDER Working Paper Series 114, World Institute for Development Economic Research (UNU-WIDER).
    7. Lozano Navarro, Francisco-Javier, 2015. "Elasticidad precio de la oferta inmobiliaria en el Gran Santiago
      [Housing supply elasticity in Greater Santiago]
      ," MPRA Paper 65012, University Library of Munich, Germany.


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