Cuadernos de economía
On-line version ISSN 0717-6821
ALDAZ-CARROLL, ENRIQUE and MORAN, RICARDO. ESCAPING THE POVERTY TRAP IN LATIN AMERICA: THE ROLE OF FAMILY FACTORS. Cuad. econ. [online]. 2001, vol.38, n.114, pp. 155-190. ISSN 0717-6821. doi: 10.4067/S0717-68212001011400003.
Much like an inherited trait, poverty trends to pass from parent to child. How prevalent is this "curse of the poor," why do some escape it, and how can we help improve the odds? This study sets out to gauge the extent of this "Intergenerational transmission of poverty" (ITP) in 16 Latin American countries, analyze certain factors affecting it, and raise policy considerations. Among the various a priori determinants of ITP, the study focuses on "family factors" - those more closely related to characteristics of the household, such as mother's schooling, than to its economic and social environment. The empirical results indicate that the prevalence of ITP in Latin America is strong and that family factors play an important role in the educational achievement of poor children - and hence on their expected lifetime income. Regressions for 16 Latin American countries show that children in poverty with fewer siblings, more educated parents, higher household income, and living in urban areas are significantly more likely to complete secondary education. Completion of secondary education is taken as the threshold level of schooling at or above which a child of poverty should have a fair chance of escaping the poverty cycle in the 21st century. Results for the subset of countries with the required data further show that children of the poor born to single adolescent mothers, or who did not attend a preschool program, or were undernourished, are less likely to complete secondary education than children of the poor without the corresponding attributes. Moreover, supplementary data reviewed for this study, but that could not be adequately indexed for the regressions, tend to support findings by other researchers pointing to two additional family factors affecting educational performance among children from poor households: domestic violence and ethnicity. Study results suggest that poverty-reduction strategies take into account family factors much more than is commonly the case, especially in complement to the supply of education and other basic social services that are so greatly emphasized today. As corollary, we recommend that such social services should, whenever possible, focus on the undereducated households in poverty, rather than on their members individually, to improve their children's education outcomes and thereby increase their chances of breaking out of the cycle of intergenerational poverty.
Keywords : Household Behavior and Family Economics; Education; Welfare and Poverty; Urban; Rural and Regional Economics; Household Analysis.