Little change in Carib income distribution

PORT OF SPAIN, Trinidad, (CANA): THE CHANCES of improving income distribution remain slight in most countries of Latin America and the Caribbean, the Economic Commission for Latin America and the Caribbean (ECLAC) said in a study released last week.

A person's position regarding future distribution of income is practically hereditary, making it difficult to change even where there has been sustained economic growth for a decade, the UN agency said following studies in detailed household profiles.

Educational, property, occupational and demographic factors all conspire to keep children of low-income homes at a disadvantage when they reach adulthood, while those from upper income households are very likely to maintain their position, ECLAC states.

These factors are all "highly transmittable between generations" as experts put it, a reality that is apparent in income distribution and other factors related to opportunities for well-being.

The study "The Equity Gap: A Second Look", was presented at the Second Regional Follow-up Conference to the Social Development Summit.

ECLAC's view is that reciprocal conditioning between growth and equity and the distributive content of development "depends critically on the application of policies that promote wider social distribution of the benefits of economic growth".

Two actions crucial to deactivating the regressive mechanisms of these inequalities are education and employment.

The study shows that income (wages, salaries, employers' earnings and/or independent workers' earnings) accounts for about 80 per cent of total household income.

This depends on income generated on the job market and is therefore determined by such factors as educational capital and the number of household members who are employed.

The core of the region's notorious inequality and rigid income distribution stems from the powerful link between education, employment and income, ECLAC says.

A person's educational capital (number of years of study, quality and appropriateness of education received) is the most significant factor influencing opportunities for well-being.

Young people from low-income households who have parents with little education tend to achieve no more than eight years of study, while their counterparts from higher income homes tend to complete 12 years or more.

This conditions their job opportunities: most (80-90 per cent) of those with no more than eight years of education are employed as operators, workers, domestic workers or farm workers, and their average monthly income is not enough to guarantee the well-being of a new family group.

In contrast, young people with 12 or more years of study (50-55 per cent) become professionals, trades people, and managers.

In spite of the expansion of education in the region in recent decades, educational inequality among young people from different social strata has remained.

Currently, just 20 per cent of the young people whose parents did not complete primary education manage to finish secondary school.

In contrast, 60 per cent of the children of parents with at least ten years of study complete this level. In the early 1980s, these percentages, although slightly lower, showed similar contrasts.

During the 1990s, some countries progressed towards more equality in the educational achievements of children from different socio-economic groups, although the differences remain considerable.

Progress in terms of school coverage and reduced drop-out rates have benefited children from middle and low-income backgrounds the most.

Another achievement of this period has been the increase in educational differences favouring girls.

During the last decade, more girls than boys caught up with their peers in seven of nine countries.

The number of girls finishing fourth grade remained about the same or grew in nine of ten countries, and in eight of 12 countries the percentage of girls completing at least six years of primary education increased.

Child labour, associated primarily with poverty, continues to severely limit opportunities for well-being. As of 1997, 22 per cent of adolescents from 13 to 17 years old worked for a wage, and 27 per cent of those 15 to 17 years old were already at work.

In general, early entry into the workforce follows dropping out of the educational system, therefore the income generated by children and adolescents comes at a high cost in terms of educational opportunity.

Boys 13 to 17 years old who work average two years less of education than those who don't work: that figure is just slightly lower among girls. This loss of two years of education translates into about 20 per cent less income throughout a person's working life.

Another phenomenon now openly recognised as a factor in reproducing poverty is teenage parenthood. ECLAC has found clear indications that this occurs much more among lower income groups.  

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