How’s life in Latin America? Deepening inequalities and hard-won gains at risk

By Romina Boarini, Director of the OECD WISE Centre (Centre for Well-being, Inclusion, Sustainability and Equal Opportunity) and Ragnheiður Elín Árnadóttir, Director of OECD Development Centre

The Latin America and the Caribbean (LAC) region has experienced considerable gains in well-being over the past two decades, according to the new report How’s Life in Latin America? Measuring Well-being for Policy Making by the OECD Centre on Well-being, Inclusion, Sustainability and Equal Opportunity (WISE) and the OECD Development Centre. The eleven countries studied in the report – Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Paraguay, Peru and Uruguay – have experienced many improvements in quality of life since the early 2000s such as increased life expectancy, reduced child and maternal mortality, and better access to drinking water. The number of people in absolute poverty (i.e. those whose income is not enough to meet basic needs such as food or shelter) has declined – from 1 in 3 in 2006 to 1 in 5 by 2019 – and the share of the population with an upper secondary education has risen from 34% to 46%.  

These gains in well-being outcomes, however, only tell part of the story. The pace of progress has slowed since the mid-2010s. People’s perceptions of their living standards have deteriorated, as have their trust in government and their support for democracy. The share of workers in informal employment has remained high (at 57%) while disparities in well-being have persisted across population groups.

Indeed, depending on people’s age, gender, ethnicity, education or place of residence, citizens enjoy widely different levels of well-being. For instance, although women across the eleven countries are better educated and live longer than men, they experience far worse labour market outcomes and have less civic and political voice. Young adults experience higher poverty and unemployment rates than their older counterparts, and have lower trust in the police. There are also deep cleavages between urban and rural areas in terms of housing conditions and poverty rates. In these eleven countries, only around two-thirds of the rural population have access to drinking water services or hygienic toilet facilities on average, compared to 96% and 93% of the urban population, respectively.

Our findings also show that there is a great diversity of experience between countries in terms of well-being outcomes. For example, while homicide rates decreased on average across the 11 countries analysed between 2000 and 2018, national trends varied widely, with homicides more than halving in Colombia and tripling in Mexico over the same period.

Opportunities for better lives are not equally distributed between urban and rural areas in the group of countries studied

Today, the COVID-19 pandemic threatens to exacerbate some of the existing challenges. Poor housing conditions have made it harder to combat the virus and opportunities for remote learning, working and telemedicine have been scarce for those on the wrong side of the digital divide. Sharp falls in life satisfaction and social connections – especially for the most vulnerable – underscore the human cost of the crisis and the need to craft recovery plans through the lens of people-centred well-being.

But what does a well-being approach to policy look like? To foster inclusive and sustainable well-being alongside economic growth, LAC countries need to anchor well-being priorities into their long-term government operations. This starts with developing a better understanding of inequalities across different dimensions of people’s lives, harmonising data collection between and within countries and strengthening the measurement of subjective well-being experiences. Producing more and better statistics is not enough: institutional, analytical, and operational innovation in the way governments approach policy-making is also needed. One example of such an innovation would be to establish a priority list of headline indicators that go beyond GDP – spanning material conditions, quality of life, resources for sustainability, and inequalities across population groups and territories – that could inform design, implementation and evaluation of policies.

 Many countries in the region are well-advanced in taking a people-focused, multidimensional approach to measurement and policy, through their efforts to achieve the UN Sustainable Development Goals, or through National Development Plans focused on social, environmental and inclusion issues as well as economic growth. However, (as in other regions) stronger links are required between the vision set out in national strategies and their actual implementation through budget allocation, policy development and targeting.

Ultimately, the challenges faced by the LAC region – such as increasing disconnect between governments and citizens, persistent inequalities across population groups and territories, the current and long-term threats of biodiversity loss and climate change, and building forward better after the pandemic – require whole-of government responses focused on improving people’s well-being equitably and sustainably. Facing these challenges will also require stronger regional cooperation, and having a shared idea of policy priorities. Using a common framework to identify relative strengths and weaknesses can help to support more effective international partnerships to implement better policies for better lives across Latin America.