Rural Non-Agricultural Employment and Poverty in Latin America: Evidence from Ecuador and El Salvador

There is a perception that much of the progress achieved in Latin America in recent years in terms of economic stabilization, the resumption of investment, and the return to economic growth could be undermined if society remains polarized between those who can participate in the growth process and those who are left out. The sectoral composition of poverty is a matter of some debate. With high rates of urbanization, poverty in Latin America is rapidly acquiring an urban complexion alongside its more historical rural one, with some arguing that most of the poor now reside in urban areas (see for example, Morley, 1994). But there are many reasons for focusing also on rural poverty. First, reliable data are scarce, so that any conclusion regarding the distribution of the poor between urban and rural areas must remain somewhat tentative. Second, countries within the region vary sharply in the sectoral composition of their populations, even if the region as a whole is becoming increasingly urbanized. Third, the typical definition of ‘urban’ encompasses both major conurbations and other small and medium-sized towns. In fact, the bulk of what are termed ‘urban’ households are found in the latter category, and these are more closely tied to the rural economy.1 Finally, there is little doubt that the greatest degree of deprivation is still found in the countryside in most Latin American countries.