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close this bookProspects - Quarterly Review of Education, Vol. 25, No. 1, 1995 (Issue 93) - Science Teaching for Sustainable Development (UNESCO; 1995; 152 pages)
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View the documentReducing poverty in Latin America among indigenous people: an enhanced role for education* - George Psacharopoulos and Harry Anthony Patrinos
View the documentPeer abuse or bullying at school: basic facts and a school-based intervention programme - Dan Olweus

Reducing poverty in Latin America among indigenous people: an enhanced role for education* - George Psacharopoulos and Harry Anthony Patrinos

George Psacharopoulos (Greece)

Senior Adviser, Human Resources Development and Operations Policy, The World Bank, Washington. He has taught at the London School of Economics. His publications include: Indigenous people and poverty in Latin America; Women’s employment and pay in Latin America; Human resources in Latin America and the Caribbean; Essays on poverty, equity and growth; and many articles on the economics of education, poverty and income distribution.

Harry Anthony Patrinos (Canada)

Economist, Education and Social Policy Department, The World Bank; previously with the Economic Council of Canada. He received his doctorate from the Institute of Development Studies at the University of Sussex. His publications include: Indigenous people and poverty in Latin America and articles on ethnicity, the economics of education, poverty and labour market outcomes.

*The views expressed here are those of the authors and should not be attributed to the World Bank.

The indigenous peoples of Latin America live in conditions of extreme poverty. This paper represents an initial attempt at documenting the socio-economic conditions of indigenous people using empirical data from national survey sources. The nature of the analysis is microeconomic, using household survey data that includes information on indigenous peoples defined in terms of ethnic self-perception, language use and geographical concentration. The countries on which the analysis is based include Bolivia, Guatemala, Mexico and Peru. The aim is to empirically investigate the socio-economic conditions of the indigenous people of Latin America and to identify correlates of poverty. This documentation provides the vital information needed to design strategies for operations and to assist these groups in a poverty reduction strategy. The results point to an enhanced role for education in reducing poverty among the indigenous population of Latin America.

Ethnicity is intimately associated with poverty and disadvantage in many developing countries. Given that ethnic inequalities are affected by public policies toward education, employment, infrastructure, markets and affirmative action, then an important challenge is to understand the circumstances, causes and extent of this association. This is the main purpose of the present study, the goals of which are: (a) to determine the extent of poverty among Latin America’s indigenous population; and (b) to compare the socio-economic conditions of the indigenous population with the non-indigenous population.

By far the greatest attention paid to the socio-economic disadvantages of indigenous people has been by sociologists and economists exploring the situation of Amerindians in the United States (see, for example, Sandefur & Scott, 1983; Sandefur, 1986; Sandefur & Sakamoto, 1988; Snipp & Sandefur, 1988; Sandefur et al., 1989; Sandefur & Pahari, 1989). Much less is known about indigenous people in other countries, especially in Latin America.

What is known about the socio-economic conditions of Latin America’s indigenous people is that they make up a significant portion of the rural poor. These groups live on the periphery in marginal areas, and are often landless. In Latin America, indigenous people make up about 27 % of the rural population (IFAD, 1992). A rural poverty mapping indicates that in eleven of eighteen national cases, the indigenous population is listed among the main groups of the rural poor (IFAD, 1992).

The international literature suggests some priority areas of research, which this study attempts to undertake. These include estimating the extent of poverty among Latin America’s indigenous population, and comparing the living conditions of the indigenous population with those of the non-indigenous population. The basic human capital differences between the two populations are also examined.

Data and methodology

When conducting research on ethnicity and socio-economic development, certain problems must be addressed at the outset. These include: defining the target population; deciding which research methodologies to apply; and overcoming the scarcity of data. The approach taken here is empirical analysis using microdata from household surveys conducted in four Latin American countries.

While many countries in the region have sizeable indigenous populations, few have questions designed to identify the ethno-linguistic characteristics of individuals in their household or labour-force surveys. Definitions of indigenous people differ from country to country due to the use of different survey instruments. Given the available data, three different variables identify indigenous respondents: language spoken; self-perception; and geographic concentration. In this analysis, language defines the indigenous population in Bolivia and Peru. In Bolivia, it is possible to distinguish between monolingual and bilingual (Spanish and indigenous language) individuals, while in Peru only monolingual indigenous or Spanish speakers can be isolated. The Guatemalan study uses the self-identification or self-perception method of defining the reference population. The geographic location or concentration of the indigenous population is generally used in combination with questions dealing with self-perception or language identity when the indigenous population is concentrated in specific territories. This is the method that has been used to include Mexico, a country with a large absolute number of indigenous people.

The poverty analysis includes profiles of the poor, with overall estimates of poverty rates for indigenous and non-indigenous populations. Poverty rates according to selected characteristics are presented in an attempt to better isolate the correlates of poverty. The ‘headcount’ index of poverty, that is the proportion of the population with an income below the poverty line, is estimated.

Definitions of poverty and poverty indicators are numerous, and substantial disagreement exists on which of them are more relevant. This study, however, in its focus on the indigenous dimension, settles on a standard methodology and attempts to avoid the methodological and theoretical issues associated with designing a poverty line. In an attempt to analyze the existence and correlates of absolute poverty, a poverty line - a measure that separates the poor from the non-poor - is used. Those whose income falls below the line are poor; those above are non-poor. Following convention, two poverty lines are used: an ‘upper’ and a ‘lower’ poverty line. These indicate the boundary between the poor and the very poor, respectively. The lower poverty line will be referred to here as the ‘extreme poverty line’.

The country analyses in this study utilize an income-based definition of poverty, whereby individuals living on a per capita household income of less than a given standard are classified as poor. A uniform poverty line of US $60 per person per month in 1985 purchasing power parity (PPP) dollars is used. An extreme poverty line of US $30 per person per month in 1985 PPP dollars is also utilized.

While a profile of the poor is useful and informative, it is based on only a few categories of independent variables. For a more thorough investigation of the determinants of poverty, a multivariate model is used to standardize the many factors that simultaneously affect the probability of an individual being poor. A model is used in an attempt to capture the major determinants of poverty at the individual level. The model expresses the probability of being poor as a function of various characteristics such as education, employment, and being indigenous.

Empirical results


Poverty among Latin America’s indigenous population is pervasive and severe (see Table 1). In Bolivia, while more than half of the total population is poor, over two-thirds of the bilingual indigenous population and almost three-quarters of the monolingual indigenous population is poor. The majority (66 %) of the population of Guatemala is poor, with 38 % of all households below the extreme poverty line. The indigenous population, however, is disproportionately poor: 87 % of all indigenous households are below the poverty line and 61 % are below the extreme poverty line.

TABLE 1: Poverty in Latin America (percent of population below poverty line)
















Source: Psacharopoulos and Patrinos, 1994.

In Mexico, individuals in ‘more indigenous’ municipios suffer poorer socio-economic condition than individuals in less indigenous municipios. A positive correlation exists between municipio indigenous concentration and the incidence of poverty. Municipios of increasing indigenous concentration experience higher percentages of poverty and extreme poverty. In municipios with a less than 10 % indigenous population, the poverty headcount index is 18 %; in municipios which are 10 to 40 % indigenous, 46 % of the population is poor; and in municipios which are more than 70 % indigenous, over 80 % of the population is poor.

Most of the indigenous population of Peru is poor - 79 % - and more than half is extremely poor. In fact, indigenous people are one-and-a-half times as likely to be poor than are non-indigenous people, and almost three times as likely to be extremely poor. Consequently, indigenous people account for 11 % of the sample population, yet they comprise 19 % of the poor and 27 % of the extremely poor Peruvians.

The results of a statistical analysis of the determinants of poverty in Mexico reveals that a 1 % increase in the municipio’s indigenous population leads to an increase in the individual’s probability of being poor by approximately one-half of a percentage point. This variable has considerable impact given a potential range of indigenous population concentration of zero to 100 %. Living in a 50 % indigenous municipio increases one’s probability of being poor by a substantial 25 %, marking the greatest possible increase in the probability of being poor of any observed factor.

In a similar exercise for Bolivia, it was found that being indigenous increases the probability of being poor by 16 %. The probability of poverty increases by almost 45 % for household members whose head of household is unemployed. This suggests that employment is more important than being indigenous in reducing poverty. Among indigenous heads of household, participation in the labour force leads to a 40 % reduction in the incidence of poverty.


The living conditions of the indigenous population are generally abysmal, especially when compared to the non-indigenous population. In Guatemala, the majority of the population does not have access to such public services as water, sanitation and electricity. Less than one-third of all indigenous households have water piped to their homes for their exclusive use, compared to almost half of non-indigenous households. Approximately one-half of all indigenous households have no sanitary services, and three-quarters have no electricity.

In Bolivia, households headed by a non-indigenous person have more rooms per capita than do households headed by an indigenous person. And although the indigenous group has a much higher level of home ownership, this says little about the quality of housing, which is lower for the indigenous group. This is reflected in the lower rate of sewage connections in indigenous households and the lower prevalence of latrines. An important finding is the substantially higher prevalence of land ownership among indigenous people. This could indicate that indigenous people maintain ties to rural areas, allowing them to maintain already-established support networks.

In the less-indigenous areas of Mexico, material possessions such as televisions, refrigerators and automobiles are more plentiful than in the more indigenous areas. Services such as piped water, electricity and telephone service are also more common in less indigenous areas. In contrast, home ownership is more prevalent in more indigenous areas, but a closer examination reveals a clear disparity in the physical composition of homes between more and less indigenous municipios. Homes in less indigenous areas are built from higher quality materials: 71 % are constructed with concrete and brick, while in more indigenous areas only 29 % are concrete and brick. A larger percentage of homes in indigenous areas are built with wood: 21 %, as opposed to 6 % in less indigenous areas.

While indigenous people are more likely to own their homes in Peru, here, too, the physical composition of these homes is consistently inferior in comparison with those of Spanish-speakers. Of particular importance is the availability of public water and sanitation facilities. Only 46 % of indigenous homes have public-water facilities, while 31 % use wells and 15 % use the river as a source of water; only 21 % of indigenous homes have public waste disposal. An examination of rural/urban differences further highlights the indigenous population’s deprivation. As indigenous households are less likely to have a public source of water in both rural and urban areas, indigenous people are much more likely to obtain water from wells; 16 % of urban indigenous households and 39 % of rural indigenous households have wells, whereas the corresponding proportions of Spanish-speaking households are only 2 and 10 %. The rural prevalence of indigenous people results in their greater exposure to the diseases associated with poor water quality. Almost half of all indigenous households rely on kerosene as a source of light; 88 % of the homes of Spanish speakers use electricity. Within urban areas, the use of kerosene is seven times greater in indigenous homes than in the homes of Spanish speakers. The relatively large proportion of urban indigenous households without public water, public sewage disposal and electricity is evidence of a group of indigenous squatter settlements in the urban areas.


There is a very strong correlation between schooling attainment and being indigenous, and between schooling attainment and the poverty category. In Bolivia, the schooling levels of indigenous people are approximately three years less, on average, than for non-indigenous individuals. The difference is even greater for indigenous females, suggesting that they are the most disadvantaged group in Bolivian society. In Guatemala, the majority of indigenous people have no formal education and of those who do, the majority have only primary education. On average, indigenous people have only 1.3 years of schooling and only 40 % are literate.

Access to formal education in Mexico has expanded in recent years, and improvements have been made in indigenous areas. Nevertheless, educational levels remain higher in areas with non-indigenous populations. Illiteracy continues to be an important problem for some states, especially those which are predominantly indigenous. The rate of illiteracy increases for both males and females as municipio indigenous percentages rise. The disparity is greatest in the female sub-sample, where the illiteracy rate is more than four times greater in the ‘high’ indigenous municipio category than in the ‘low’ indigenous municipio category. In addition, the gender disparity in the illiteracy rate increases as the municipio indigenous percentage increases. For the least indigenous municipios, the male/female difference is only 2 %; but for the ‘high’ indigenous municipios, the difference is 16 %, showing a pattern of increasing male/female educational inequities as municipio indigenous concentration increases. The higher the proportion of indigenous people in a municipio, the lower the average level of schooling of its population. Males, on average, have almost seven years of schooling in those municipios with less than 10 % indigenous population, whereas males in those municipios with 40 % or more indigenous population have only 3.5 years of schooling.

For the adult population of Peru, the difference between indigenous and non-indigenous people’s educational attainment has narrowed in recent years. Even so, non-indigenous people have 20 % more education than do indigenous people. Not only is the indigenous population less educated and less literate than the Spanish-speaking population, but it also lags behind the non-indigenous population in terms of training. Differences in educational levels of indigenous and non-indigenous individuals are substantial. Only 40 % of indigenous heads-of-household have education in excess of primary school. In contrast, 41 % of Spanish-speaking heads-of-household have some secondary school education, and 22 % have some post-secondary education. Only 6 % of indigenous heads-of-household have some post-secondary education. Educational gaps between the indigenous and non-indigenous populations, as well as between genders, have tended to decrease over time.

The parents’ skills and educational attainment are reflected in the schooling and other human capital characteristics of their children. In Guatemala, 9 % of non-indigenous children and 21 % of indigenous children are reported as being employed. The children of indigenous origin are born with many socio-economic disadvantages and are unable to keep up with their non-indigenous peers. Indigenous children are more likely to repeat grades at the primary level and are more likely to drop out of school altogether.

In Bolivia, non-indigenous children aged 6 to 18 years are still much more likely to be enrolled in school than indigenous children. Interestingly, the poorer children are actually more likely to be enrolled than the non-poor children. In terms of years of schooling attained among the in-school population, non-indigenous children receive more schooling than do indigenous children regardless of gender. Multivariate analysis shows that being indigenous has a strong effect on schooling attainment. In terms of school enrolment, the participation rate is slightly higher among males, with a greater percentage of non-indigenous youths attending school than indigenous youths.

In Peru, 40 % of non-indigenous children are enrolled in school, as compared to 36 % of indigenous children. The effects of language and rural location are reflected in school attendance. Among the indigenous population, school attendance is greater among Aymara speakers than it is among Quechua speakers, and greater still among urban children. School attendance is also affected by child labour, both in the home and in the labour market; as hours worked by the child increase, school attendance decreases. Being indigenous is a major determinant of child work-force participation. Among the indigenous population, Quechua speakers are much more likely to work than are Aymara speakers. In addition, both parental employment and education affect the work decision of indigenous children. Children of less-educated parents, children of fathers who are employed as farmers, and children of mothers who are not in the labour force are more likely to work.

In Mexico, enrolment rates are higher in non-indigenous areas. The gap in enrolment rates between indigenous and non-indigenous areas widens with age, reaching a peak at 17 years, at which point the non-indigenous enrolment rate is approximately twice the indigenous rate. Child labour-force participation is greater in indigenous areas than in non-indigenous areas. This can be partially explained by the rural concentration of the indigenous population. Parental education plays an important role in average educational levels among children. The average increase in school attainment for a child with a mother with secondary or greater education, as opposed to a mother with no education, is 3.5 years in non-indigenous areas. Similar differences exist in indigenous areas. Where comparisons are available, the impact of parental education is greatest in less-indigenous municipios. The employment conditions of the head-of-household also have a clear impact on a child’s average educational attainment. Heads-of-household who work in non-agricultural pursuits in either indigenous or non-indigenous areas have children with higher levels of educational attainment than otherwise employed heads-of-household. The contribution of the income of working children to total family income is substantial. As expected, the contribution of child labour to family income increases with age, while increasing educational attainment reduces the contribution. Child income plays a slightly greater role in total family income in indigenous areas than in non-indigenous areas.


There is, fortunately, an unrealized potential. This is evident throughout Latin America and is highlighted here for the case of Mexico (Figure 1). The educational level of the population has been increasing rapidly over the last few decades. The average schooling level of indigenous males has increased continuously over time. For indigenous women, the post-1950s increase is particularly remarkable. The statistical results show that by equalizing human capital characteristics, much of the income differential between indigenous and non-indigenous people would disappear. These findings suggest that since policy-influenced variables, such as education and occupation, are largely responsible for income differences, the socio-economic condition of indigenous people in Latin America can be improved. This provides considerable hope for the future. The question that remains, however, is how to improve the productive capabilities of the indigenous population. One obvious solution is to raise their educational level.

FIGURE 1: Educational attainment by ethnicity and birth cohort in Mexico

Source: Psacharopoulos and Patrinos, 1994.

For education projects, knowledge about the indigenous population can aid in determining the location of new schools, targeting those with poor performance, and - when and if appropriate and in demand - providing bilingual education. The apparent strong influence of education in ameliorating poverty and increasing income, especially in indigenous areas, conveys a need to focus on improving access; this is an important development issue with significant and beneficial long-term socio-economic repercussions.

The involvement of indigenous people can aid in the improvement of the design and implementation of development projects. First, agreement on what must be done should be reached between the interested parties. It is necessary to decide on the goals of the intervention from the outset. Is it reform? And if so, what is meant by reform? In the case of indigenous people, is the goal assimilation, integration and the erasure of indigenous culture? Or is it the preservation of indigenous culture through policies designed with the participation of indigenous people? In the case of education, the lack of meaningful participation by indigenous people could result in the loss of their culture and language.

Institutional issues associated with the functioning of labour markets are also important considerations. To some extent, indigenous people receive lower earnings and have a higher incidence of poverty because they are locked into the secondary sector of the economy. This information can aid in the creation of appropriate employment generation schemes. While many poor and non-poor workers are located in the informal sector of the economy, it is especially important for the indigenous poor. This information points to an appropriate sector to be targeted in any poverty-reduction strategy.

The Western model of development views traditional cultures as poor, so that efforts are directed at improving their standard of living. This is based on the ideology that all cultures must achieve a certain level of material acquisition in order that they can be developed. There is the belief that tribal cultures are unable to satisfy the material needs of their people. Some argue that all people share a desire for what is defined as material wealth, prosperity and progress. Others, it is believed, have different cultures only because they have not yet been exposed to the superior technological alternatives offered by industrial civilization. The problem with this reasoning is that the materialistic values of the industrialized countries of the world are not culturally universal. Indigenous populations are different, and taking this into account means not imposing non-indigenous values. Any attempt to improve the conditions of indigenous populations would benefit from the consideration of ‘traditional’ customs and expertise.


There is a lack of empirical studies regarding the socio-economic conditions of Latin America’s indigenous population. Important issues to be tackled include: defining the target population; solving the problem of scarce data; and designing appropriate research methodologies.

To identify the reference population in this study, it was necessary to make do with surveys that provide single indicators. However, what is needed are multiple indicators - as used in the United States and Canada censuses. A whole range of indicators are necessary, including language, self-identification or self-perception, geographic location or concentration, ancestry and, possibly, dress (as in the Guatemala 1993 census).

Therefore, what is needed is better data, so that in the future researchers can undertake more in-depth analyses and include a larger number of countries. In addition, longitudinal research could be conducted; that is, an attempt should be made to answer questions such as: ‘What was the level of discrimination ten, twenty and thirty years ago?’ ‘What will it be five, ten or thirty years from now?’ ‘What were the effects of past policies and programmes?’ ‘What will be the effects of present policies and programmes?’

It may also be useful to study the experiences of developed countries with indigenous populations. Their treatment of the ‘indigenous question’ could prove useful, especially in terms of analyzing what these countries did successfully and what efforts were unsuccessful. The information at their disposal, as well as how they use it and collect it, could also be examined.

A future research project on indigenous people could combine the quantitative approach taken here with qualitative analysis, such as the participatory/observation research approach. The idea is to combine comprehensive empirical work with field work and micro-survey techniques. For example, if it is found that indigenous people in the cities of Bolivia are working as self-employed individuals and earning less than non-indigenous individuals with the same level of schooling, then in-depth interviews with these groups should be conducted to ascertain the reasons for the income discrepancy. Without this qualitative data, probable reasons for the discrepancy, including ethnicity, access to training and cultural values, are merely speculative. Such sophisticated differences are difficult to assess using only empirical analysis, generally based upon less-than-perfect data sets.

Many indigenous people living in urban areas maintain ties with the rural communities, to their mutual advantage. Resources are constantly being exchanged between town and country. This transfer of resources is important and not always adequately captured in household survey data. Such complex social networks can only be examined with a qualitative research approach. An examination of informal safety nets can be accommodated through a participatory research exercise.

The unpaid but productive activities of indigenous people living and working in rural communities are often misrepresented as unemployment or underemployment. Many peasants, however, are often involved in a variety of activities that provide income, although these are not easily observed, especially with aggregate household data. Apparently idle peasants are in most cases heavily involved in many activities which are not easily categorized. This type of information can only be obtained through direct observation. The information collected can be quantified and analyzed to aid in the design of rural development efforts with indigenous components.

There is much useful information regarding the manifestations of poverty that individuals do not usually disclose openly. This may include information about their health, sanitation practices, attitudes and behaviour regarding birth control, income or discrimination. A new approach, therefore, is necessary to supplement conventional sources. Conversational interviews can be used to ascertain not only the people’s income and ability to pay, but also their values with regard to language, history, and culture. It may be most effective to involve the target populations in the design of surveys and projects, and to discuss the purpose of these initiatives with target groups.


International Fund for Agricultural Development (IFAD). 1992. The state of world rural poverty: an inquiry into its causes and consequences. New York, New York University Press.

Psacharopoulos, G.; Patrinos, H.A., eds. 1994. Indigenous people and poverty in Latin America: an empirical analysis. Washington, DC, The World Bank.

Sandefur, G.D. 1986. American Indian migration and economic opportunities. International migration review (Staten Island, NY), vol. 20, p. 55-68.

Sandefur, G.D.; McLanahan, S.; Wojtkiewicz, R.A. 1989. Race and ethnicity, family structure and high school graduation. Madison, WI, University of Wisconsin, Institute for Research on Poverty. (Discussion paper no. 893-89.)

Sandefur, G.D.; Pahari, A. 1989. Racial and ethnic inequality in earnings and educational attainment. Social service review (Chicago, IL), vol. 63, p. 199-221.

Sandefur, G.D.; Sakamoto, A. 1988. American Indian household structure and income. Demography (Washington, DC), vol. 25, p. 71-80.

Sandefur, G.D.; Scott, W.J. 1983. Minority group status and the wages of Indian and Black males. Social science research (San Diego, CA), vol. 12, p. 44-68.

Snipp, M.; Sandefur, G.D. 1988. Earnings of American Indians and Alaskan Natives: the effects of residence and migration. Social forces (Chapel Hill, NC), vol. 66, p. 994- 1008.

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