Trickle-down does not work in social policy either: the micro side of the macro success story of inequality reduction in Latin America

  • Séverine Deneulin
03 April, 2018

It is a widely accepted fact in academia and policy circles that Latin America has experienced important gains in human development outcomes over the last decade, mainly through the creation of new non-contributory health and pension programmes, and the re-reform of old social insurance, as well as innovative cash transfer programmes.

However, despite these gains, the reduction in inequality has not trickled down into the lives of many young people, particularly on the urban margins. They have apparently been more affected by deteriorating labour market conditions than by the social policy success story. The macro stories we tell are not the micro stories we hear.

In fact, a large part of the young population in Latin America remains excluded from participation in a secondary education of quality and a labour market with enough security and income to guarantee a decent living. Almost a third of Latin Americans aged between 15 and 24 who live in poverty (less than $4 a day) neither work nor study. A micro study of young people in an informal settlement of Buenos Aires has collected some moving stories of young people who are particularly affected by this double exclusion.

Many observers have praised the emergence of a new middle class in the region. Yet those who live above the poverty line remain highly vulnerable to external shocks. This is particularly the case for Mexico. Guaranteeing labour rights and decent wages could go a long way towards protecting people from vulnerability risks. But it is difficult to achieve this given the entrenched dual structure of production in Latin America. A large share of the region’s economic output remains produced by a minority employed in highly skilled jobs, leaving a majority employed in low-skilled and low-productivity activities. This duality or structural heterogeneity, in the words of ECLAC, becomes even more difficult to break when it acquires a territorial dimension.

A fifth of the Latin American population is estimated to live in informal settlements, and most of that population is young (in Buenos Aires, for example, 40% of the population of the informal settlements is below age 18). This geographical expression of the duality of the Latin American socio-economic structure makes traditional social policies rather ineffective at reaching those at the urban margins. How long it is possible to sustain an expansion of social protection and social services without a parallel expansion of formal employment and transformation of urban spaces is a major question that all Latin American countries will soon have to answer.

The question is particularly acute when young people’s lack of employment and social rights is accompanied by rising levels of violence. The unequal distribution of labour, health and educational opportunities (among others) across Latin American cities has been accompanied by an increase in urban violence and drug trafficking. Latin America is now the most insecure region in the world; of the 50 cities with the highest homicide rates in the world, 42 are in Latin America. Violence is now the leading cause of death for the population aged 15-50. This violence is not intrinsic to urban living but is linked to the failure of social policies to trickle down effectively at the urban margins. In Nicaragua, for example, programmes to re-insert young offenders into their communities have failed in the absence of employment policies targeted at youth.

No research yet exists on social policy in Latin America in the context of structural violence. It is perhaps time to shift our attention to what happens between the macro and micro levels of social policy. A new special section of Oxford Development Studies has attempted to start doing so and let the voices of the young people at the margins explain how social policy intersects with the institutions they encounter during the course of their lives – including families, places of work, civil society organisations, state institutions, and neighbourhoods. Better contextual understanding of how they live may contribute to more effective social policies that help every citizen, wherever they are born, to participate in the life of society on an equal basis.

Read the special section on ‘Urban inequality, youth and social policy in Latin America’ in Oxford Development Studies 46.1

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About the author(s)
Diego Sánchez-Ancochea
Professor of the Political Economy of Development and Head of Department