Traditional Excluding Forces:
A Review of the Literature

Latin America and the Caribbean is the region with the most unequal income distribution in the world. This income inequality is linked to the unequal distribution of human and physical assets and differential access to key markets and services. Poverty, deficient access to health care, poor educational outcomes, poor working conditions, and lack of political representation are more the norm than the exception for substantial pockets of the region’s population. Inequalities in these areas are a major factor in the social tensions that have wracked the region throughout its history. Nonetheless, another key ingredient in these social tensions is the existence of traditional excluding forces that worsen outcomes for the excluded groups. The pockets of the population that are typically on the “unfavored” side of the distribution of outcomes are largely identified by observable characteristics such as ethnicity, race, gender, and physical disability. This chapter reviews what is known about these traditionally excluded groups.

Everyone participates in multiple exchanges in his or her daily life, and these exchanges occur within a certain set of social, economic, and political institutions (formal and informal) that provide opportunities and services needed to obtain valuable outcomes in a market society. Social exclusion arises when those formal and informal institutions constrain the functioning of some groups of agents: the excluded. These institutions are the transaction points, which are connected to outcomes (namely, discrimination, housing segregation, lack of access to education, etc.) that reflect the exclusion suffered by these groups. These outcomes have been described in the academic literature on excluded groups. This survey attempts to (a) identify the transaction points where different actors in Latin American societies suffer exclusionary processes, (b) document the outcomes that arise from those processes, and (c) describe the literature that has addressed these issues for traditionally excluded groups.

Who are the traditionally excluded sectors that this survey will address? Social exclusion in Latin America and the Caribbean predominantly affects indigenous peoples, Afro-descendants, persons with disabilities, and those living with the stigma of HIV/AIDS. Given the paucity of studies on HIV/AIDS-infected people, this analysis deals with only the first three of these traditionally excluded populations. The literature on gender differentials is given only cursory treatment and is reviewed only to the extent that it simultaneously addresses differentials in other individual characteristics (indigenous peoples, Afro-descendants, etc.). In the section “Labor Markets and Exclusionary Outcomes,” the survey devotes special attention to migrants, who confront particularly daunting barriers for labor market insertion­.

The markets or transaction points considered have been clustered into three categories: (a) relative deprivation in terms of income, education, land and housing, physical infrastructure, and health; (b) labor markets as a transaction point that both produces exclusionary outcomes and serves as a resonance box for inequities in other markets; and (c) other transactions in the political and social arena (political participation, social protection, and security/crime). As in any classification effort, the boundaries between these clusters are not clear-cut, and some pieces (or ideas) were harder to classify than others.

Because of the importance of the matter, the literature on this topic has been vast and diverse, with contributions from an interesting variety of disciplines. However, this survey limits itself to presenting the main ideas discussed in academic economics papers that address the issues of traditionally excluded groups from a quantitative perspective. An extensive bibliography that encompasses the sources for these ideas appears at the end of this report, and the online version of this chapter (www.iadb.org/ipes) contains hyperlinks to the electronic versions of the references cited within. Box 2.1 provides basic definitions for some of the terms used in this chapter.

RELATIVE DEPRIVATION AND EXCLUSION

Multidimensional deprivation is one outcome of exclusion, but to thoroughly understand it demands knowledge of the process behind the exclusionary outcome. The transaction points addressed in this section include the processes of accessing sources of income, educational opportunities, a place to live, health services, and physical infrastructure. The papers on which this section is based form part of the literature on outcome differentials that derive from exclusionary processes functioning in these transaction points.

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Circo urbano ciudad de México (Mexico City Urban Circus), Jalil Rashid Graniel Espinosa. México Winner - Category 4: Exclusion from the Labor Market. Micro-documentaries Series "The Faces of Exclusion".

Income Deprivation

Income deprivation is only one of the outcomes of exclusion, but it is clearly one of the most crucial. Furthermore, material deprivation is highly correlated with other dimensions of deprivation that affect the capacity of the excluded to obtain desirable outcomes in a market economy. Lack of employment (or employment at low productivity) results in low incomes and poverty but also restricts the unemployed and those in low-productivity jobs from participating in social institutions such as unions and other worker organizations geared toward improving working conditions ( Gaviria, 2006 ).

Poverty and limited access to income are probably among the most-studied topics in the social exclusion literature on Latin America. There are at least three reasons for this focus. First, the literature dealing with these topics for Latin America tends to replicate, with some lag, previous applications in developed countries. Second, data on income are widely available through household surveys in most countries. Finally, and most importantly, many of the problems of limited access reviewed in this chapter (e.g., health, education) may actually arise from lack of income generation opportunities. If this is indeed the case, policies targeted to solve differential access to income sources may also help to improve other aspects of segregated groups’ living conditions.

The literature reveals at least two approaches to defining poverty: one with poverty measured as low income and the other focusing on unsatisfied basic needs (e.g., running water, education). Nonetheless, there is also the view that poverty among indigenous peoples varies according to the perceptions, actual conditions, and priorities of each indigenous group. Indigenous peoples are aware and proud of their cultural and ethnic identities, languages, social organization, and ancestral knowledge, and none of these aspects are captured by the traditional measures of human poverty (Coba, 2005).

Whether basic income statistics are presented alone or the impact of a specific exclusionary characteristic (e.g., ethnicity or disability) on income is estimated, the results are largely the same: the poverty statistics for indigenous peoples and Afro-descendants reveal a worse situation than that of the rest of the population in almost the entire region (Costa Rica and Haiti are two important exceptions). When poverty rates are estimated by race, Afro-descendants constitute 30 percent of Latin America’s population but represent 40 percent of the region’s poor. In general, indigenous peoples and Afro-descendants, in different magnitudes, have lower income levels compared to the rest of the population (Machinea, Bárcena, and León, 2005 ; Busso, Cicowiez and Gasparini, 2005 ; Bello and Rangel, 2002; Dade and Arnush, 2006).

When income statistics are considered over time, overall there has been a reduction in poverty in the region, but the share of indigenous and Afro-descendant poor is still larger than the share of nonindigenous non-Afro-descendant poor. Interestingly, indigenous peoples have largely been unaffected by either increases or declines in national poverty rates in Mexico, Bolivia, Ecuador, and Peru. The conclusion is that the income sources of indigenous peoples are less affected by macroeconomic shocks, whether positive or negative. Moreover, analysis of data for Ecuador and Mexico during their last crisis-and-recovery episodes has shown that indigenous peoples were less affected by the crises as they unfolded, but their recovery was so slow that the net impact on them was worse than for nonindigenous populations. When two basic ways of reducing poverty to attain the Millennium Development Goals—growth in the mean and reduction in inequality—were evaluated, it was found that even small income redistributions from wealthy individuals to nonwhites would be equivalent to relatively large annual growth rates through 2015 (Dade and Arnush, 2006; Espinosa, 2005a, 2005b; Gacitúa Marió and Woolcock, 2005b; Hall and Patrinos, 2005; Patrinos and Skoufias, 2007; Escobal and Ponce, 2007; Benavides and Valdivia, 2004; Borja-Vega and Lunde, 2007; Borja-Vega, Lunde, and García-Moreno, 2007; Contreras, Kruger, and Zapata, 2007).

Overall, there is agreement in the literature that the lack of access to income on the part of excluded groups is a widespread phenomenon in Latin America and the Caribbean (Ponce, 2006; Telles and Lim, 1998; Montaño, 2004; Hall and Patrinos, 2005; Dudzik, Elwan, and Metts, 2002; Hernández-Jaramillo and Hernández-Umaña, 2005; Sánchez, 2006).

Education Differentials

Income deprivation, as reviewed in the previous subsection, can both cause and be caused by deprivation in other dimensions, most notably education. The opportunity cost for low-income families of sending their children to school may preclude them from investing in schooling and condemn these youngsters to low productivity, low wages, and poor-quality jobs. Income deprivation is partially the cause of differentials in education, but these differentials in education also perpetuate disparities in income. In order to integrate excluded groups, it is necessary to break this vicious circle. The exclusion phenomenon in its purest form is evident when, even after different income levels are controlled for, there are still differences in education outcomes, or the converse, when even after education levels are controlled for, there are still differences in income levels. The transaction points in these cases are the school system and the labor market.

The literature has analyzed various aspects of the education experience for different groups. Some authors argue that the key differentials are at the initial steps in formal education, reporting evidence of lower probabilities of attending school as well as lower graduation rates for primary school. Others estimate differences between Afro-descendants and indigenous peoples and the rest of the population and find that restricted participation in the secondary education system is one of the main exclusionary factors interfering with the development of these groups. Higher education levels have received less attention. Scattered evidence does show that the disabled have less access to education than the rest of the population (Filmer, 2005; Sánchez and García, 2006; Beckett and Pebley, 2002; García-Aracil and Winter, 2006; World Bank, 2005; Lémez, 2005).

Several authors document differences in test scores, grade repetition, and other traditional educational indicators for disabled people, indigenous populations, and different racial and ethnic groups (Hernández-Zavala et al., 2006; Patrinos and Psacharapoulos, 1992; Porter, 2001; Solano, 2002; Ñopo, Saavedra, and Torero, 2004).

Illiteracy is the most blatant form of education deprivation. Its evolution does not seem to be homogeneous in the region, with reports of decreasing illiteracy rates and literacy gaps for indigenous peoples in Bolivia but no significant changes over time for Afro-descendants in Ecuador. Differences in literacy rates between indigenous men, indigenous women, and the general population are also reported for Panama (Mezza, 2004; Ponce, 2006; Coba, 2005).

Returns to education in the form of differences in job opportunities are the key transmission mechanism that perpetuates education and income differentials. Since excluded groups have lower education levels than the rest of the population, in order for them to close the salary gap, the quality of schools available to excluded groups must be improved and access to them must be increased. But if returns to education vary among groups, as seems to be the case,[1] that will not be enough (Patrinos and García-Moreno, 2006).

Providing a broader picture of the challenges in the area of education, studies show that language barriers seem to be an important factor behind continued social exclusion. The lower educational performance of indigenous children in Mexico is mostly due to the lower outcomes of those who are monolingual, whereas bilingual indigenous children perform almost equivalently to their nonindigenous counterparts. In rural Peru, after economic and linguistic differences between students are adjusted for, the disparity in performance between rural and urban schools disappears. Similarly, between one-half and two-thirds of the differences in grades between indigenous and nonindigenous students in Bolivia and Chile can be attributed to variations in school quality; also, between one-fourth and two-fifths of the same gap can be attributed to family characteristics (Parker, Rubalcava, and Teruel, 2005; Cueto and Secada, 2004; McEwan, 2004).

Policy-oriented papers highlight the need to improve educational opportunities for excluded groups. For the problems of access and attendance rates, the issue of pedagogic pertinence of school curricula to students’ needs and environment is of considerable importance, and the challenges of designing a multicultural approach (e.g., bilingual schools) are significant as well. The region needs to improve strategies for promoting bilingual/multicultural practices in areas with higher proportions of indigenous populations (Hopenhayn and Bello, 2001; Bello and Rangel, 2002; Peredo, 2004).

Breaking the intergenerational transmission of disadvantages has to do with, among other things, better access to education for excluded groups. It is urgent to reduce inequalities in primary school. In general, there has been substantial progress towards the Millennium Development Goals in primary education, but indigenous peoples and Afro-descendants have lagged behind (Buvinic´, 2004; Ocampo, 2004; IDB, 2003b; Bouillon and Buvinic´, 2003; Buvinic´ and Mazza, 2005).

Health Disparities

The concept of health in Western societies often varies from that for indigenous peoples or Afro-descendants in Latin America and the Caribbean. In the Western tradition, the right to health can be defined as being able to achieve the highest possible level of physical and mental health and access to public health services (Sánchez and Bryan, 2003). By contrast, for many indigenous peoples, for example, health is an integral concept associated with emotional, spiritual, and physical elements in people’s relationship with their surroundings. In other words, health is understood as having a good relationship with Mother Nature. The difference in concept is not only academic. The cause of poor health conditions among indigenous peoples may reflect differences between occidental medicine and traditional ancestral treatments, and there may be an analytical bias against traditional medicine in favor of Western medicine (Sánchez and García, 2006; World Bank, 2005; Bernal and Cárdenas, 2005; Peredo, 2004).

The research on access to health care and health outcomes often ignores the fact that different personal and group characteristics, rather than race or ethnicity, may be behind differential health outcomes. In particular, the rural-urban dimension explains a sizable part of the health gap between ethnic minorities and whites. Even though the literature has not presented formal, indisputable evidence of discrimination against indigenous peoples or Afro-descendants with respect to health outcomes, many papers argue that such discrimination does exist. In Guatemala, characteristics of the indigenous population (geographic location, education, household size, etc.) have been found to be unable to account for lower height-for-age scores and to point to unobserved factors, including discrimination (Dade and Arnush, 2006; Sánchez and Bryan, 2003; Marini and Gragnolati, 2003; Hopenhayn and Bello, 2001; Coba, 2005; Ribando, 2005; Peredo, 2004; Bello and Rangel, 2002; Robles, 1999).

When infant mortality rates for indigenous-urban, nonindigenous-urban, indigenous-rural and nonindigenous-rural are disaggregated, two important conclusions emerge. First, indigenous populations in urban areas have lower infant mortality rates than indigenous (and nonindigenous in some cases) populations in rural areas. Second, indigenous populations have higher infant mortality rates than nonindigenous populations living in their same area (urban or rural). Thus, the larger share of indigenous populations living in rural areas is an important determinant of worse indigenous health outcomes but cannot account for the entire differential. It is an open question whether including other factors (education, income level) could close the gap and preclude a discrimination interpretation (Machinea, Bárcena, and León, 2005 ; Coba, 2005).

Finally, there is an incipient literature on stigmatization and access to health care for people with physical or mental disabilities. This literature argues that failure to ensure that people with disabilities receive effective educational services results in exclusion from the labor market and contributes to poor health (Dudzik, Elwan, and Metts, 2002; Acuña and Bolis, 2005 ).

Land and Housing Differences

Geographical segregation increases the disadvantage of excluded groups because both quality of housing and access to public services tend to be deficient in the areas where these groups are concentrated. Although there is an old and broad literature on housing differentials, researchers interested in Latin America and the Caribbean have only recently begun to focus on these issues and discuss them in two dimensions: access to land or housing, and housing quality, which includes many health-related issues like running water, garbage disposal, and adequate sanitation (Gaviria, 2006).

International organizations have pushed the idea of providing access to land titles for the poor as a cost-effective poverty alleviation policy. However, the case of Mexico shows that although access to land can raise household welfare significantly in rural areas, it would not be enough to lift most of the indigenous population out of poverty. Moreover, Afro-descendants have been much less successful in obtaining collective land rights than indigenous peoples. Only the constitutions of Brazil and Colombia (and then only since 1988 and 1991, respectively) mention the cultural and agrarian land rights of their Afro-descendant populations (Finan, Sadoulet, and de Janvry, 2005; Dade and Arnush, 2006; Ribando, 2005).

Most Afro-descendants have been integrated into the mestizo culture and therefore do not possess the racial/cultural group identity or specific relationship to the land that would allow them to receive privileged access to land. A notable exception is the Garifuna community, descendants of escaped slaves from St. Vincent, which won communal land rights in Honduras and Nicaragua by proving that its language, religious beliefs, and traditional agriculture techniques are inextricably linked to its notion of land (Ribando, 2005).

With respect to ownership ratios, indigenous peoples and Afro-descendants seem to be at least as well off as the rest of the population. In addition to issues regarding ownership, significant housing quality problems (e.g., overcrowding, unsatisfied basic needs) exist among the indigenous populations in Costa Rica and Panama. The evidence shows that the housing conditions of the indigenous population living in rural areas are not very different from those of the nonindigenous living in the same area. The differences in the aggregates are strongly affected by the different percentages of individuals from indigenous and nonindigenous groups living in urban and rural areas. Similarly, in the Limon province of Costa Rica (home to most Costa Rican Afro-descendants), Afro-descendants and non-Afro-descendants live in similar housing conditions. This does not imply the absence of housing problems for the indigenous or Afro-descendant population. Rather, given where they live, Afro-descendants and members of indigenous groups live in conditions similar to those of their neighbors; the question of why they live in these areas and why these areas lack access to public services remains unanswered (Benavides, Torero, and Valdivia, 2006; Ponce, 2006; González, 2006; Solano, 2002; Coba, 2005; Putnam, 2002).

According to the literature, there are three main issues with respect to land access for indigenous peoples: (a) gender-differential treatments, (b) the impact of major development projects (e.g., oil drilling in Colombia and Venezuela, hydroelectric and other types of power stations in Chile, deforestation in the Venezuelan and Brazilian Amazon), and (c) migration to cities.

A few decades ago, the majority of the indigenous population lived in rural areas. There are still sizable “ancestral” lands, but the migration of individuals from indigenous populations to the cities has created new problems. It has been argued that the liberal reforms of the nineteenth century that introduced the idea of private land ownership are the cause of indigenous poverty. Most countries overlook the common law rights traditionally used by indigenous peoples to allocate land use. The relationship of indigenous peoples with the land is not only economic; it includes many social, cultural, and religious aspects as well (Bello and Rangel, 2002).

Many times the combination of a country’s legal framework with major development projects forces indigenous migration to the cities. There are two reasons why such migration places indigenous women in a particularly vulnerable situation. First, they are traditionally specialized in the management of natural resources, and after migration they face stronger challenges adapting to urban environments. Second, according to indigenous customs, land ownership is typically passed to male family members in the understanding that women will get married and gain access to land through their husbands. Because indigenous women cannot work in their traditional specialities in cities and dissolution of families is more common among those who migrate to cities, migrant indigenous women are at greater risk for being cut off from assets. For instance, this is the case for the Aymara and Quechua communities in Bolivia (Peredo, 2004).

As with the indigenous populations, the Afro-descendant population of Colombia is also undergoing an important urban migration process. These migrants (many forcefully displaced) end up living in lower-quality houses in neighborhoods with poor access to public utilities. Similar results have been found for Honduras, Ecuador, and two locations in Argentina. However, the evidence in Peru points in the opposite direction. Afro-descendants there have better building quality and better access to public utilities than the general public ( Sánchez and García, 2006; González, 2006; Ponce, 2006; Universidad Nacional de Tres de Febrero , 2006; Benavides, Torero, and Valdivia, 2006).

How important is access to land for indigenous and Afro-descendant populations? According to a World Bank, 2005, although its cultural connotations are not the same for indigenous peoples and rural Afro-descendants in Colombia, territory seems to be the essential element for improving well-being. Afro-descendants in rural areas perceive access to land as a guarantee of subsistence and continuity of cultural traditions. Indigenous peoples see in territory the basic pillar of quality of life, and collective ownership of territories implies the recognition of ancestral rights.

Disparities in Access to Physical Infrastructure

The literature reports that Afro-descendants and indigenous peoples have lower access to public utilities and that investment in infrastructure in areas populated by these groups is below “ideal” levels. As emphasized previously, the differences in access reported among ethnic and racial groups are not attributed to ethnic discrimination. Rather, these are the consequence of other characteristics of the ethnic groups (e.g., urban vs. rural) (Ponce, 2006).

According to most sources, Latin American governments invest very little or do not invest at all in infrastructure and services in areas mostly populated by Afro-descendants. This has negative consequences for the marketing of agricultural products and ecological resources. Sample statistics for the Afro-descendant population in Brazil and Colombia are telling. For instance, the municipality with the highest percentage of Afro-descendants in Colombia has the lowest per capita level of government investment in health, education, and infrastructure. Moreover, the lack of access to infrastructure is not gender neutral. As a result of the traditional gender-based division of labor in the region, rural female workers and indigenous women live under harsher conditions because of deficiencies in access to running water, electricity, and transportation (Sánchez and Bryan, 2003; Ribando, 2005; ECLAC, 2000).

In Colombia, access to and quality of public services are the main determinants of the lower levels of well-being among the Afro-descendant population. However, Afro-­Peruvians have significantly greater access to public infrastructure than the average citizen and the indigenous population. In Ecuador, in terms of sewerage system coverage, access to running water, and telephone, electricity, and garbage disposal services, the indigenous population systematically has the worst statistics, followed by Afro-descendants and the white population (e.g., 10.9 percent of indigenous households have telephones at home compared to 17.7 percent of Afro-descendant households and 42.1 percent of white households). Consideration of whether these ethnic differences reflect different shares of urban and rural settlements among ethnic groups leads to the conclusion that the condition of the Afro-descendant population cannot be explained by geographic location alone (Sánchez and García, 2006; Benavides, Torero, and Valdivia, 2006; Ponce, 2006).

LABOR MARKETS AND EXCLUSIONARY OUTCOMES

In terms of exclusion, labor markets act as resonance boxes for inequities or for exclusion mechanisms already exercised in other social spheres. Labor markets convert into earnings differentials variations in access to health care services, educational quality, and basic living conditions. These earnings differentials are, in turn, the main channel through which differences in health, education, and basic living conditions persist. Differences in human capital characteristics such as education and health, discussed earlier in this chapter, are also a major determinant of the labor market performance of traditionally discriminated-against groups. Labor markets are not necessarily the culprits of exclusion, but the extent to which they work as catalysts for the execution of exclusion mechanisms is an issue that must be addressed.

Limited Access to Labor Markets

Much of the literature on limited access to labor markets focuses on migrants and people with disabilities. Although today’s world is characterized by high global mobility and fewer restrictions on migration of high-skilled workers, international labor markets remain segmented in a way that limits the international migration of poor and unskilled workers. People migrate in the hope of attaining better working and living conditions in their new home. However, other variables—including racial, social, and cultural discrimination—interfere when immigrants try to find a job in their country of destination.

Migration occurs both within Latin America and the Caribbean and, more predominantly, from this region to more developed countries. Migration effectively reduces the labor supply in the home country. Self-selection by skill appears to be very important. Migrants suffer many difficulties in labor markets that locals do not, ranging from economic to cultural, social, psychological, and linguistic problems. Gender, for instance, is often a limitation on migrants’ access to labor markets. In Chile, Peruvian immigrants are mainly women and greatly concentrated in the domestic service and the informal sectors, despite their educational attainment. While the educational level of immigrants varies widely, this heterogeneity is not reflected in their occupations. Extensive labor segmentation limits the access of trained people to jobs suitable to their preparation. However, a study of gender differences among cross-border migrants in Argentina found no differences between males and females in occupational status, earnings, and unemployment levels (Clark, Hatton, and Williamson, 2003; Pellegrino, 2002; Bello and Rangel, 2002; Stefoni, 2002; Cacopardo and Maguid, 2001; Mazza, 2004).

Access to labor markets is also limited for people with disabilities. Disabled people participate less in the labor market than the rest of the population because of transportation obstacles and the costs they face in reaching the workplace and in being productive once there. From the point of view of labor demand, sometimes employers view a disability as a sign of lower productivity (or additional workplace costs), triggering “statistical” discrimination. In general, the disabled participate in low-skill jobs, agriculture, and service-related industries. In the developing world (although data in this area are scarce), people with disabilities are much less likely to be economically active (either employed or unemployed) than the population overall. Policy changes to combat labor market discrimination against those with disabilities require access to better data as a first step. Improved accessibility for the disabled and greater rehabilitation technology would also increase the possibilities of social and economic inclusion of these people (Hernández-Licona, 2005; Elwan, 1999; Montes and Massiah, 2002; Álvarez, 2000).

In principle, an efficient labor market with perfectly rational players is largely “race blind.” However, statistics suggest that this is not the reality. An examination of factors that influence workplace decisions suggests that race and ethnicity play significant roles in determining job placement and career opportunities. A report on an IDB (2001b) conference summarizes key facts about differentials in economic opportunity among different ethnic groups in Argentina, Brazil, Peru, and Bolivia. It concludes that the mechanisms through which such differentials may arise are persistent educational gaps and discrimination in the labor market. In Guatemala, ethnicity has been found to have a surprisingly small effect on female labor force participation. However, non-Afro-descendant workers earn more than double the income of Afro-descendants (male and female) in Brazilian metropolitan areas.

Unemployment is also drastically higher among Brazilian Afro-descendants than among Brazilian non-Afro-descendants. In rural Mexico, indigenous men are substantially less likely to be wage earners than nonindigenous men, and wage gaps between the two groups are around 15 percent in agricultural wage jobs and 35 percent in self-employment, both favoring nonindigenous individuals over their indigenous peers (Arends, 1992; Roland, 2001; de Janvry, Finan, and Sadoulet, 2005; Fazio, 2007).

Limited Access to Formal Jobs

The literature on formality and traditionally excluded groups has not been abundant. In Peru, even though the percentage of Afro-descendants outside the economically active population is higher than the national figure, the percentage of Afro-Peruvians working in the formal sector is higher than that of the rest of the population. Also, the average labor earnings of Afro-Peruvians are not different than the average for the rest of the population (although the average per capita income is significantly lower). There is, however, a high degree of occupational segregation, as 40 percent of Afro-descendants work in low-skill jobs (requiring low levels of qualifications) (Benavides, Torero, and Valdivia, 2006; Duryea and Genoni, 2004).

Interestingly, an individual’s migratory condition is a characteristic that overlaps with ethnicity and gender. The gender and migratory condition of laborers were found to determine the seasonal labor recruitment patterns of plantations in Guatemala. Large plantations preferred hiring migrants over cheaper female laborers because hiring migrants inhibited the development of workers’ solidarity. In general, migrants work under poor conditions. Guatemalan migrant workers in the Chiapas area are mostly males (90 percent) and dedicated to agricultural labor (98 percent); almost one-third of them are illiterate, and hence they are limited in the working conditions they can achieve. Bolivians working abroad, particularly in neighboring countries, are predominantly undocumented and illegal immigrants in the countries where they reside; thus, they are subject to abuse and exploitation, working under precarious conditions (Bossen, 1982; Angeles and Rojas, 2000; Farah and Sánchez, 2003).

Segregation and Discrimination

The literature on segregation of and discrimination against traditionally excluded groups in Latin American labor markets has been abundant. The dramatic increase in female labor force participation in the region is perhaps the most notorious change in labor markets since the 1970s. On the other hand, segregation of indigenous peoples and Afro-descendants within occupations related to domestic service has not changed substantially. Similarly, indigenous populations, especially indigenous women involved in agricultural production, still work under very precarious conditions (Peredo, 2004; Coba, 2005; Solano, 2002).

A family of papers using wage decompositions à la Oaxaca-Blinder reveals a noticeable wage gap between the public and private sectors in Brazil. There is also a wage gap by skin color and an even greater one by gender in the public sector. Earnings differentials that cannot be attributed to differences in human capital increase with job responsibilities, regardless of the skill level (Marconi, 2004; Arias, Yamada, and Tejerina, 2002; Contreras et al., 2006; Barrón, 2006; Leite, 2005; Campante, Crespo, and Leite, 2004; Guimarães, 2006).

Among the disabled, earnings and employment gaps in Chile and Uruguay are substantial. Depending on the intensity of the disability, the earnings penalty ranges between 18 percent and 26 percent in Uruguay and between 20 percent and 37 percent in Chile. On the other hand, the employment rate gaps are between 30 percent and 57 percent in both countries.

Another body of research studies earnings gaps in the region. In Lima’s labor markets, discrimination has been found to play almost no role in wage differences between locals and migrants. In Bolivia and Peru, discrimination is estimated to account for 28 percent of the ethnic wage gap observed, whereas in Guatemala and Mexico it represents up to 50 percent of the overall earnings differential. In Brazil, the income gap between indigenous and nonindigenous workers widens with increased schooling. Noticeable gaps were found to exist in employment and earnings between Afro-descendants and other workers in six metropolitan areas in Brazil in the late 1990s; in São Paulo and Salvador, it reached as high as 100 percent (non-Afro-descendants earning, on average, twice as much as Afro-descendants). In Ecuador, about half the earnings gap between indigenous and nonindigenous workers as well as between women and men is explained by educational attainment and half by discrimination. The main determinants of a child’s enrollment in school are the educational level of the mother, the father’s profession, the household’s wealth (for boys), child labor, and the opportunity cost for indigenous children. There is a significant difference in returns to schooling by ethnicity but not by gender. In another kind of market, the Uruguayan soccer market, there is evidence of racial discrimination against Afro-descendant players in the national league but not with respect to international promotions (Barrón, 2005; Ñopo, 2004; Patrinos, 2000; Roland, 2001; García-Aracil and Winter, 2006; Gandelman, 2006).

As far as the relationship between earnings and racial differences is concerned, in Peru there is a statistically significant premium for whiteness on earnings among wage earners, but not among the self-employed, suggesting the existence of employer discrimination (Ñopo, Saavedra, and Torero, 2004).

SOCIAL AND POLITICAL EXCLUSION

Political and electoral systems that exclude disadvantaged groups reduce the ability of those groups to influence public policies and programs, which results in lower investments in precisely the services they need to prosper (i.e., high-quality educational and health services). Most of the literature reports underrepresentation of indigenous peoples and Afro-descendants, but the results are not unanimous. For instance, one study finds that there are statistically significant differences among ethnic groups in socioeconomic status and subjective well-being but not in political participation, social capital, or social mobility (Gaviria, 2001). However, this result differs from those of the remaining studies, which find differences by ethnic group in political participation.

Latin America has a good track record in the area of educational quotas and quotas to increase women’s participation in representative government bodies. By 2005, eleven countries had adopted such quotas. However, there are still only incipient efforts to incorporate quotas for excluded populations such as Afro-descendants and indigenous peoples. According to data from Nicaragua and Brazil, Afro-descendants are very poorly represented politically. In 2003, only 27 of 594 Brazilian congressmen (roughly 5 percent) identified themselves as being of African descent, even though 45 percent of Brazil’s population is of African descent. Furthermore, there is not a single Afro-descendant in Nicaragua’s national assembly, even though Afro-descendants make up 9 percent of the country’s population. In general, excluded groups have very little political representation in the region (Buvini´c, 2004; Dade and Arnusch, 2006; Peredo, 2004; Benavides, 2006; Bouillon and Buvinic´, 2003).

Little has been written about the access of excluded groups in Latin America to social protection programs such as social security, conditional cash transfers, and other poverty reduction strategies. One study has found that Afro-descendants in Honduras have greater access to basic social services than indigenous peoples, perhaps because they tend to live in more economically prosperous regions than indigenous peoples, who are being left behind geographically. The study’s recommendation is for more efficient spending on public services, in particular, education and health; the introduction of evaluation programs for public services; and economic incentives for school attendance (e.g., lunch programs, transportation). A policy-oriented analysis argues that social exclusion manifests itself in Latin America mostly through the high level of income inequality; this should be combated, according to the analysis, with a long-term social policy that addresses inequality and promotes inclusion through more educational opportunities, labor policy, and social security rather than using segmented protection and social policy as a compensatory tool. A review of the situation of Afro-descendants in the region reveals a vicious circle in which limited access to goods, services, and opportunities plus low education levels lead to educational and labor market discrimination. Lack of government intervention in this area exacerbates the problem (Bouillon and Buvinic´, 2003; ESA Consultores, 2005; Ocampo, 2004; Sánchez and Bryan, 2003).

Another important aspect of exclusion is whether it can lead to political instability and social conflict. Attempts to explain social disorder and inequality in Peru find that social exclusion (defined here as limited access to human capital), but not discrimination (defined here as unequal pay for the same levels of human capital), promotes the existence and persistence of horizontal inequalities (inequalities among culturally defined groups), leading to further inequality. Ethnicity does not seem to be the prime mover of social disorder in Peru. In Ecuador, however, both social exclusion and discrimination play a role, and ethnicity appears to be a prime mover of social disorder. Neither migration, intermarriage, collective actions nor government policies constitute mechanisms of social equalization in either country (Figueroa and Barrón, 2005; Figueroa, 2006; Sánchez, 2005).

In terms of security and violence, most of the literature about vulnerable groups concentrates on gender-related violence (mostly domestic violence). Regarding the excluded groups referred to in this study, the literature focuses mainly on the case of displaced individuals in Colombia, who are largely Afro-descendants and indigenous peoples. In a new kind of study of patterns of discrimination against indigenous populations in war, with evidence from the civil war in Peru during the 1980s and 1990s, there is evidence of taste-based discrimination in war crimes (World Bank, 2005 ; Castillo and Petrie, 2005).

CONCLUSION

This chapter has attempted to summarize the prolific production of the last three decades in the area of economic analysis of exclusion in Latin America and the Caribbean. As in any inventory effort, this survey may suffer from omission problems, although the research team has attempted to minimize that possibility. The review of the literature presented here suggests that the academic community has not devoted equal attention to all dimensions of exclusion in the region. Lack of access to income and education and labor market outcomes have received much more attention than political representation, social protection, and security.

In terms of excluded groups, Afro-descendants and indigenous peoples have been the most studied, while migrants and the disabled have been relatively neglected. In part because of the lower proportion of Afro-descendants and indigenous peoples in their populations, a few countries (e.g., Uruguay and Argentina) are largely absent from the analysis, while Colombia and Panama have been the most studied countries in regard to exclusion of specific groups.

From a data perspective, it is rewarding to observe that all countries in Latin America and the Caribbean conduct periodic surveys of their populations (household surveys, censuses, etc.) with standards that guarantee valuable and useful inputs for research. Unfortunately, however, in some cases these surveys do not properly identify traditionally excluded groups. Overall, there is a need for more and better data on traditionally excluded sectors of Latin American and Caribbean society. This is particularly important when one considers that a full understanding of exclusion requires an analysis that, beyond outcomes, must explore the processes and channels through which exclusion occurs.

From a methodological point of view, the quality and approaches of the academic production are rather heterogeneous. Given the data supply that the academic community faces, the emphasis has naturally been on the documentation of differentiated outcomes for traditionally excluded groups. Only recently has the emphasis begun to shift, in at least two dimensions. On the one hand, the emphasis on documenting differences in average outcomes between the excluded and the nonexcluded has moved to documenting variations in the distributions of such outcomes. On the other hand, the emphasis on differences in outcomes has shifted to differences in processes. In terms of the latter, the advances in the experimental literature have been of extreme importance. The next chapter focuses on recent methodological developments as it seeks an understanding of a particular and extremely important aspect of exclusion: discrimination.