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Role of Economic Opportunities and Social Networks in Bolivia’s Indigenous Population

Georgetown University Center for Latin American Studies. The World Bank. Role of Economic Opportunities and Social Networks in Bolivia’s Indigenous Population. Dante Contreras, Universidad de Chile Diana Kruger, Univ. Católica de Valparaíso Daniela Zapata, ECLAC. Outline. Background

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Role of Economic Opportunities and Social Networks in Bolivia’s Indigenous Population

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  1. Georgetown University Center for Latin American Studies The World Bank Role of Economic Opportunities and Social Networks in Bolivia’s Indigenous Population Dante Contreras, Universidad de Chile Diana Kruger, Univ. Católica de Valparaíso Daniela Zapata, ECLAC

  2. Outline • Background • Income Generating Activities • Determinants of economic opportunities • Role of social networks • Concluding Comments

  3. Background • Bolivia is one of the poorest countries in Latin America. Source: The World Bank, WDI 2006.

  4. Background • Almost 30 percent of Bolivia’s population can be characterized as indigenous.

  5. Background • The incidence of poverty is greater among Bolivia’s indigenous, in both rural and urban areas.

  6. Background • The indigenous population represents a disproportionate share of the country’s poor. Source: Indigenous defined by mother tongue and language spoken. Own calculations based on MECOVI 2001.

  7. Income Generating Activities • Indigenous are more concentrated in lower-quality employment than non-indigenous workers. • Quality = formal, waged and non-agricultural jobs

  8. Income Generating Activities

  9. Income Generating Activities Source: Own calculations based on MECOVI 2001.

  10. Income Generating Activities • Are the differences in economic activity and income between indigenous and non-indigenous due to worker differences?

  11. Income Generating Activities

  12. Employment outcomes analyzed: Employment Formal employment Agricultural employment Being self-employed Explanatory variables: Gender, age and education of head of household Home ownership Access to basic services Age composition of the household Indigenous Determinants of Economic Activity

  13. Determinants of Economic Activity • Traditional studies assume that only individual characteristics affect economic outcomes. • There is evidence that relationships and ties with others in a network also affect these outcomes. • Information exchange • Behavior • Do these relationships affect economic opportunities? • We compare the role of SNs among indigenous and non-indigenous workers in urban and rural locations.

  14. Determinants of Economic Activity • Other outcomes: • Child labor and school enrollment • Financial Services • Modern health services

  15. CAijk is the availability of contacts that person i of ethnicity k has available in municipality j • is the average economic outcome of ethnic group k in municipality j Determinants of Economic Activity • Our measure of a social network is a geographic measure of local ethnic concentration, which has a size and quality dimension:

  16. Bolivia: Ethnic Population Source: INE Bolivia 2004.

  17. Determinants of Economic Activity

  18. Determinants of Economic ActivityMain Results: • Female heads of households are less likely to work, and if they do, they hold lower-quality jobs than men. • Labor market experience has a positive effect on outcomes. • Education is a key determinant in accessing higher-quality jobs in the formal and non-agricultural sectors, regardless of location and ethnicity.

  19. Determinants of Economic ActivityMain Results: • Rural location is correlated with lower-quality employment for all Bolivian workers. • The presence of pre-school children is correlated with lower employment among the indigenous, but not the non-indigenous. • The presence of older children (aged 6-18) is correlated with higher employment likelihood among indigenous workers.

  20. Determinants of Economic ActivityMain Results: Controlling for education, experience and other individual characteristics: • Indigenous workers are more likely to be employed in lower quality jobs in the informal sector, in agriculture, and as self-employed. • Do social networks play a role?

  21. Determinants of Economic Activity

  22. Concluding Comments • Social networks… …Facilitate employment, but not “quality” employment. This result is similar across ethnic lines. … Are positively correlated with children’s school attendance. … Increase access to modern health services for the rural, indigenous population.

  23. Georgetown University Center for Latin American Studies The World Bank Role of Economic Opportunities and Social Networks in Bolivia’s Indigenous Population Dante Contreras, Universidad de Chile Diana Kruger, Univ. Católica de Valparaíso Daniela Zapata, ECLAC

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