Determinants of gendered poverty differentials in Latin America: a dynamic panel and recursive local projections approach

In the landscape of Latin America, a persistent and troubling pattern has long been observed: women are more likely to live in poverty than men. This phenomenon, often called the "feminization of poverty," is not merely a matter of individual misfortune but a structural reality rooted in how societies are organized. It arises from a complex web of factors, including the unequal division of labor at home, where women often shoulder the bulk of unpaid care work, and the barriers they face in the formal economy, such as lower wages and limited access to stable jobs. For decades, economists and social scientists have known that poverty does not affect everyone equally; it hits women harder. However, a critical question remained unanswered: how do the big, sweeping forces of the economy and the stability of a country's institutions actually shape this gap? Does a growing economy automatically help women catch up, or can it sometimes widen the divide? Furthermore, when a country experiences sudden political or economic turbulence, how does that shock ripple through to the daily lives of women compared to men? Understanding these dynamics is essential because the standard models used to explain economic progress in wealthy nations often fail to capture the unique volatility and institutional fragility found in Latin America.

To untangle this, a researcher named Luis Eduardo Mella Gómez set out to examine the specific drivers behind these gendered poverty gaps across fourteen Latin American countries over a twenty-year period, from 2001 to 2021. Rather than simply looking at average poverty rates, the study focused on a specific ratio: the number of poor women relative to the number of poor men. By analyzing this ratio alongside a vast array of data points—including health spending, education savings, unemployment rates, and the stability of democratic institutions—the study sought to see how different economic and political shocks traveled through society. The researcher employed advanced statistical techniques designed to handle the messy reality of real-world data, where countries influence one another and where the past often predicts the future. This approach allowed for a clear view of how specific events, like a sudden drop in government spending or a spike in unemployment, actually changed the balance of poverty between men and women over time.

The findings challenge a common assumption that economic growth alone is the cure for gendered poverty. The data suggests that while a country's total wealth, measured by income per person, often grows, this growth does not necessarily narrow the gap between poor women and poor men. In fact, in many cases, higher income per person was associated with a wider gap, meaning that as the average person got richer, the relative disadvantage of women persisted or even grew. However, a different measure of economic health told a different story. When the study looked at labor productivity—essentially how much value each worker generates—it found that higher productivity consistently helped reduce the poverty gap. This indicates that the quality of economic growth matters more than the sheer size of the economy; it is the creation of productive, well-paying jobs that helps women escape poverty, not just a general rise in national income.

Institutions and public spending also played a decisive role, but their effects were not uniform. The study found that government spending on health was one of the most reliable factors in reducing the feminization of poverty at the national level. When countries invested more in public health, the gap between poor women and poor men tended to shrink. This makes intuitive sense, as access to affordable healthcare reduces the financial burden on families and allows women to remain in the workforce without being forced out by medical costs. Conversely, the study highlighted that the stability of a country's institutions is crucial. Latin America is known for its "institutional volatility," a term describing the frequent and sometimes chaotic changes in political rules and governance. The research showed that when these institutions became unstable, the effects on poverty were not the same everywhere. In some countries, a shock to institutional stability immediately worsened the poverty gap for women, while in others, the effect was delayed or even temporarily reversed.

Perhaps the most striking discovery was the sheer diversity of these outcomes across the region. The impact of a shock—whether it was a change in government spending, a shift in unemployment rates, or a political crisis—depended entirely on the specific context of each country. For instance, in nations with strong legal frameworks for gender equality but weak enforcement or deep-seated social inequalities, fiscal shocks often failed to help women. In contrast, countries where women held more effective power in society, regardless of their formal laws, saw different results. The study used a method to trace how a single shock rippled through the economy over several years, revealing that the transmission of these effects was highly specific to local conditions. In rural areas, where informal networks and family support are often the primary safety net, the impact of unemployment shocks was different than in cities, where formal labor markets dominate. In some rural communities, a rise in female unemployment did not immediately lead to deeper poverty because women could rely on informal cooperation structures, whereas in urban centers, the same shock led to an immediate and sharp increase in the poverty gap.

The research concludes that there is no single recipe for eliminating the feminization of poverty in Latin America. The idea that a country can simply grow its way out of the problem is incorrect; aggregate economic expansion is necessary but not sufficient. The path to narrowing the gap requires that economic and institutional changes are transmitted through channels that specifically benefit women. This means that policies must be designed with an understanding of local labor markets, the strength of social protections, and the actual distribution of power within a society. The study suggests that without addressing these underlying structural conditions, even well-intentioned economic growth or increased public spending may fail to reach the women who need it most. The persistence of these gaps is not a sign of failure in the short term, but a reflection of deep-seated structural processes that require targeted, context-specific solutions rather than broad, one-size-fits-all economic policies.