Indigenous People and Poverty in Latin America · an Empirical Analysis

Indigenous people make up a large and distinct portion of Latin America's population. While the incidence of poverty is high in Latin America, it is particularly severe and deep among the indigenous population. There is a very strong correlation between schooling attainment and ethnicity, and between schooling attainment and poverty incidence. This report documents that equalization of income-generating characteristics would boost the productivity of the indigenous population in their market and non-market activities and lead to a considerable reduction in inequality and poverty. This suggests that the socioeconomic condition of indigenous people can be improved since policy-influenced variables such as eduction are largely responsible for differences in observed earnings. This unrealized potential provides considerable hope for the future. The challenge that remains, however, is to devise the means by which to enhance the human capital endowments of the indigenous population and create the circumstances by which the indigenous population can derive the maximum benefit from their productivity-enhancing attributes according to their individual and collective predisposition.