The transition of population from agricultural activities to non-agricultural activities slowed down during the period of the world financial crisis. The percentage of agricultural households (employed and self-employed) was reduced before and after the crisis, at the same time the number of inactive employed non-agricultural households increased.
Although sectors with the greatest gap in competencies show the highest degree of poverty, all sectors classified as employed showed a decrease in poverty gaps and less inequality, particularly due to the existence of social safety nets.
In the region, as a unit, the housing and education gaps have been slightly reduced, however there are large variations between countries and within sectors.
Summary of: Rural well-being
This chapter presents an analysis of trends and changes related to regional rural well-being between 2002 and 2014 (before and after the global economic crisis), focusing on poverty, women, income inequality, non-monetary measures of well-being, and the SDGs.
The analysis is based on data from rural household surveys administered in twelve LAC countries. The surveys categorize households under five mutually-exclusive types, based on the primary occupation of household heads: 1) wage agricultural, 2) wage non-agricultural, 3) autonomous agricultural, 4) autonomous non-agricultural and 5) inactive.
The data show a stable transition of agriculture toward non-agricultural sectors. Between 2002 and 2014, rural LAC saw its agricultural sectors (wage and autonomous) shrink by more than one-fifth, while the wage non-agricultural sector increased by 50 percent. Although this developmental transition halted during the peak of the global financial crisis (2007-2010), the region managed to weather the recession with existing social programs. However, the expansion of the inactive sector indicates that there is a significant skills mismatch between households leaving agriculture to enter the non-agricultural sector. In particular, skilled jobs in non-agriculture are vacant for three times as long as unskilled jobs; as a result, the region must provide training opportunities to ensure that companies in the non-agricultural sector have a skilled workforce to draw from.
Other important trends related to rural well-being include: a) significant reductions with respect to the poverty rate, poverty gap and income inequality, probably as a result of recent social policies; b) an increase in the number of households headed by women; and c) continued inequality with respect to non-monetary measures of well-being, such as housing quality and level of education. This shows that, although poverty and income inequality have decreased, poor rural households continue to face difficulties due to unmet basic needs.
These results underscore the need for an integrated approach to policies in order to ensure continued economic development, reduced inequality, and gender parity in the short- and long-term. This approach should include, in the first instance, training programs via public-private partnerships that are geared toward reducing the skills mismatch observed throughout the region. These programs would ensure that workers possess the skills required by companies and would also reduce government costs if companies are providing the training. Secondly, the approach should incorporate policies that support women and girls, in order to ensure that women have equal skills, pay, and access to information. This could stem the cycle of gender inequality as women direct resources towards girls’ education. Lastly, investments in public housing should be addressed by means of public works programs. This would revert inadequate access to basic housing while also providing work for vulnerable households and providing retraining opportunities to facilitate the transition from agriculture to non-agriculture.