Main figures - Poverty Reduction and Growth: Virtuous and Vicious Circles

• Growth is critical for poverty reduction. On average, for every one percent of economic growth, poverty declines by 1.25 percent in Latin America (Chapter 4).
  
• About 25 percent of Latin Americans live on less than $2 a day (page 21). While China experienced annual per capita growth rates of about 8.5 percent between 1981 and 2000, reducing poverty by 42 percentage points, Latin America's per capita GDP declined by 0.7 percent during the 1980s and increased by about 1.5 percent per year in the 1990s, with no significant changes in poverty levels.
  
• Over the past 15 years, poverty fell slightly in Central America (from 30 to 29 percent), increased in the Andean Community (from 25 to 31 percent), and declined in the Southern Cone area (from 24 to 19 percent). In the Caribbean, Jamaica experienced a decline in poverty of 15 percentage points between the early 1990s and early 2000s, while the Dominican Republic sustained an 8 percentage point increase over the same period (table 2.1, page 22).
  
• Poverty has a negative and strongly significant impact on growth, which is also economically significant. On average, a 10 percent increase in poverty reduces annual growth by 1 percentage point (page 116). A 10 percent increase in poverty is likely to be associated with a decline in investment of about 6-8 percentage points (page 119).
  
• Latin America and the Caribbean is the most unequal region with the exception of Sub-Saharan Africa. The richest one-tenth of the population in the region earns 48 percent of total income, while the poorest tenth earns only 1.6 percent. In industrialized countries, by contrast, the top tenth receives 29.1 percent, while the bottom tenth receives 2.5 percent. If Latin America had the level of inequality of the developed world, its income poverty levels would be closer to 5 percent than to the actual rate of 25 percent (page 45).
  
• Comparing regions within countries reveals staggering differences in prosperity. In 2000, income per capita in the poorest municipality in Brazil was barely 10 percent of that in the richest; in Mexico, per capita income in Chiapas was only 18 percent of that in the capital (page 129). Regional differences account for more than 20 percent of inequality in Paraguay and Peru, and for more than 10 percent in the Dominican Republic, and Rep�blica Bolivariana de Venezuela. In Bolivia, Honduras, Mexico, Paraguay, and Peru, the difference in poverty counts among regions is more than 40 percentage points (figure 7.1, page 130).
  
• Skills upgrading through formal education has been much slower in Latin America and the Caribbean than in East Asia. As a result, most of the region has significant deficits in secondary and tertiary schooling and a lower accumulation of average years of education (figure 9.2, page 167).
  
• A typical family head requires at least a high school diploma to make a significant dent in poverty. Poverty rates are 25 to 40 percentage points lower among families headed by high school graduates compared with those whose head has not completed primary education. Only a college education secures an income level that makes ends meet: in almost all countries less than 10 percent of individuals are in poverty when the family is headed by a college graduate (page 167).
  
• University degrees benefit the rich more than the poor. In Chile, Nicaragua, and El Salvador, the best-paid college workers enjoy returns to tertiary education 30 to 40 percent larger than the returns for the college educated in jobs of lower pay. The poor face lower tertiary education returns since they tend to have a disadvantage in education quality at home and school, as well as unequal access to the better paying jobs (pages 186-189).
  
• Having a mother with only primary education increases the risk of school dropout by as much as 1.6 times in Chile and 60 percent in El Salvador compared to having a college-educated mother. A low educated father additionally increases school failure risks by up to 1.4 times in Chile and 40 percent in the Dominican Republic (pages 191-193).
  
• Children and youth from the 20 percent poorest families face a higher risk of school failure than those from middle-class families. The risks range from 55 percent in Brazil to 20 percent in Chile (pages 191-193).
  
• Salaried workers in the informal economy and the self-employed account for 25 to 70 percent of employment across countries in the region. The gender gap in average earnings ranges from 12 percent in Mexico to 47 percent in Brazil. Race and ethnicity are a more significant source of earnings disadvantage than gender. The indigenous population in the region on average earns 46 to 60 percent of the earning of non-indigenous, while pardos (mixed race) and pretos (blacks) in Brazil earn just over half of average earning for whites (page 148).