Trapped? Inequality and Economic Growth in Latin America and the Caribbean

Jul 1, 2021

Chapter 1. Regional Human Development Report 2021

Latin America and the Caribbean (LAC) is a region in a high-inequality low-growth trap.

Despite decades of progress, the region remains the second most unequal in the world, and countries in LAC exhibit higher income inequality than those in other regions at similar development levels.

Inequality, like poverty, is multidimensional and goes beyond income. Some groups suffer greater inequality than others and in various dimensions.

For women, the playing field in the labour market is still not level. 

LGBT+ people face discrimination in possibly every aspect of their lives. Ethnic and racial minorities lack recognition as active economic and political agents.

The region is also characterized by very volatile and, on average, low economic growth, associated with low productivity and poor productivity dynamics.

Understanding the nature of the trap, the common factors underlying it, and their complex interactions is the first step to breaking free from it. This report aims to start a conversation by examining some of those factors.

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