Trends in multidimensional poverty in Latin America

Abstract

This chapter reviewed the trends in multidimensional poverty in Latin America in the two decades before the Covid-19 pandemic using two alternative indices: an internationally comparable, acute poverty index (global MPI), and a broader, regionally tailored index (MPI-LA). By definition, poverty incidence as measured by the MPI-LA is much higher than that as measured by the global MPI. But both indices exhibit similar country rankings and a significant reduction of multidimensional poverty during the period, with a stronger reduction during the first half. Most countries experienced major improvements across all indicators, with significant improvements not only in income poverty and social security and employment, but also in schooling achievement and access to basic services. The incidence of acute poverty registered the fastest reduction among the poorest groups. However, the Covid-19 pandemic irrupted in a scenario in which multidimensional poverty levels were still high and earlier economic growth had reversed in much of the region. The impact of the pandemic and related lockdown measures has certainly gone beyond income, with potential mid- and long-term detrimental effects on nutrition, health, and schooling. Moreover, the war in Ukraine is also negatively impacting the world economy, and Latin America is no exception. All of this may reverse, to a great extent, the gains in poverty reduction achieved over the first 20 years of the millennium.