role of economic opportunities and social networks in bolivia’s indigenous population dante...

Role of Economic Role of Economic Opportunities and Social Opportunities and Social

Networks in Bolivia’s Networks in Bolivia’s Indigenous PopulationIndigenous Population

Dante Contreras, Universidad de ChileDante Contreras, Universidad de Chile

Diana Kruger, Univ. Católica de ValparaísoDiana Kruger, Univ. Católica de Valparaíso

Daniela Zapata, ECLACDaniela Zapata, ECLAC

The World BankGeorgetown UniversityCenter for Latin American Studies

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OutlineOutline

BackgroundBackground

Income Generating ActivitiesIncome Generating Activities

Determinants of economic Determinants of economic opportunitiesopportunities

– Role of social networksRole of social networks

Concluding CommentsConcluding Comments

33

BackgroundBackground Bolivia is one of the poorest countries in Bolivia is one of the poorest countries in

Latin America.Latin America.

7,483

5,462

3,906 3,564

2,2061,459 1,373 1,034

Arg Chile LAC Brazil Peru EcuadorParag. Bolivia

Income per Capita, Selected Countries, 2004US$ (2000)

Source: The World Bank, WDI 2006.

44

BackgroundBackground

Almost 30 percent of Bolivia’s population Almost 30 percent of Bolivia’s population can be characterized as can be characterized as indigenousindigenous..

Bolivia: Ethnic Population, 2001

Ethnic Group Population ('000)Population

(% )

Indigenous 2,362 29%Quechua 1,431 18%Aymara 870 11%Other indigenous 61 1%

Non-Indigenous 5,777 71%

Total 8,139 100%Ethnic group defined on mother tongue and language spoken.

Own calculations based on MECOVI 2001.

55

BackgroundBackground The incidence of poverty is greater among The incidence of poverty is greater among

Bolivia’s indigenous, in both rural and Bolivia’s indigenous, in both rural and urban areas.urban areas.

Bolivia: Poverty Rate by Area and Ethnicity, 2001

Ethnic Group Indigenous Non-Indigenous Total

Rural 87.0% 71.7% 81.1%

Urban 67.8% 50.6% 53.7%

National 80.7% 55.4% 64.1%

Ethnic group defined on mother tongue and language spoken. Source: Own calculations based on MECOVI 2001.

66

BackgroundBackground The indigenous population represents a The indigenous population represents a

disproportionate share of the country’s poor.disproportionate share of the country’s poor.

Source: Indigenous defined by mother tongue and language spoken. Own calculations based on MECOVI 2001.

29.0%

71.0%

36.7%

63.3%

TotalPopulation

Poor

Non-Indigenous

Indigenous

77


Indigenous are more concentrated in Indigenous are more concentrated in lower-quality employment than non-lower-quality employment than non-indigenous workers.indigenous workers.

QualityQuality = formal, waged and non- = formal, waged and non-agricultural jobsagricultural jobs

88

Income Generating ActivitiesIncome Generating ActivitiesBolivia: Economic Activity by Ethnicity and Area, 2001

Economic Activity of Head of Hhold. IndigenousNon-

IndigenousNATIONALFormal sector 21% 47%

Waged worker 22% 43%

Agriculture 51% 14%

URBANFormal sector 41% 54%

Waged worker 40% 47%

Agriculture 7% 3%

RURALFormal sector 9% 20%

Waged worker 9% 30%Agriculture 82% 56%

Ethnic group defined on mother tongue and language spoken. Own calculations based on MECOVI 2001.

99


Source: Own calculations based on MECOVI 2001.

151

259

92

214

117

194

62

Average Formal Informal Waged SelfEmpl.

Non-Agric.

Agric.

Average Monthly Income by Economic Activity(Current US$)

1010


Are the differences in economic Are the differences in economic activity and income between activity and income between indigenous and non-indigenous due indigenous and non-indigenous due to worker differences?to worker differences?

1111

Bolivia: Labor Force Characteristics by Ethnicity and Area, 2001

Indigenous Non-Indigenous

Age - Head of household

Rural 46 43

Urban 45 43

Total 46 43

Education - Head of household (years)

Rural 4.0 5.1

Urban 6.1 9.5

Total 4.7 8.5

Female workers (% total workers)

Rural 51% 48%

Urban 53% 51%Total 52% 51%

Ethnic group defined on mother tongue.Own calculations based on MECOVI 2001.


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Determinants of Economic Determinants of Economic ActivityActivity

Employment Employment outcomes analyzed:outcomes analyzed:– EmploymentEmployment– Formal employmentFormal employment– Agricultural Agricultural

employmentemployment– Being self-employedBeing self-employed

Explanatory Explanatory variables:variables:– Gender, age and Gender, age and

education of head education of head of householdof household

– Home ownershipHome ownership– Access to basic Access to basic

servicesservices– Age composition of Age composition of

the householdthe household– IndigenousIndigenous

1313


Traditional studies assume that only individual Traditional studies assume that only individual characteristics affect economic outcomes.characteristics affect economic outcomes.

There is evidence that relationships and ties There is evidence that relationships and ties with others in a network also affect these with others in a network also affect these outcomes.outcomes.– Information exchangeInformation exchange– BehaviorBehavior

Do these relationships affect economic Do these relationships affect economic opportunities?opportunities?

We compare the role of SNs among We compare the role of SNs among indigenous and non-indigenous workers in indigenous and non-indigenous workers in urban and rural locations.urban and rural locations.

1414


Other outcomes:Other outcomes:– Child labor and school enrollmentChild labor and school enrollment– Financial ServicesFinancial Services– Modern health servicesModern health services

1515


Our measure of a Our measure of a social networksocial network is a is a geographic measure of local ethnic geographic measure of local ethnic concentration, which has a size and concentration, which has a size and quality dimension:quality dimension:

jkijkijk YCASN *

CACAijkijk is the availability of contacts that is the availability of contacts that person person i of ethnicity of ethnicity k has available in has available in municipality municipality j

is the average economic outcome of is the average economic outcome of ethnic groupethnic group k in municipalityin municipality j

jkY

1717Source: INE Bolivia 2004.

Bolivia: Ethnic PopulationBolivia: Ethnic Population

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Bolivia: Contact Availability, by Ehtnicity and Department

Department Aymara Quechua Non IndigenousChuquisaca 0.00 0.50 0.48La Paz 0.68 0.08 0.23Cochabamba 0.03 0.77 0.20Oruro 0.48 0.15 0.34Potosi 0.09 0.70 0.21Tarija 0.01 0.06 0.92Santa Cruz 0.01 0.12 0.81Beni 0.01 0.02 0.93Pando 0.01 0.03 0.86Ethnic group defined on mother tongue and language spoken. Own calculations based on Mecovi 2001. "Other" ethnic group not shown.

1919


Main Results:Main Results: Female heads of householdsFemale heads of households are less likely are less likely

to work, and if they do, they hold lower-to work, and if they do, they hold lower-quality jobs than men.quality jobs than men.

Labor market Labor market experienceexperience has a positive has a positive effect on outcomes.effect on outcomes.

EducationEducation is a key determinant in is a key determinant in accessing higher-quality jobs in the formal accessing higher-quality jobs in the formal and non-agricultural sectors, regardless of and non-agricultural sectors, regardless of location and ethnicity.location and ethnicity.

2020


Main Results:Main Results: Rural locationRural location is correlated with lower- is correlated with lower-

quality employment for all Bolivian workers.quality employment for all Bolivian workers.

The The presence of pre-school childrenpresence of pre-school children is is correlated with lower employment among correlated with lower employment among the indigenous, but not the non-indigenous.the indigenous, but not the non-indigenous.

The presence of The presence of older childrenolder children (aged 6-18) (aged 6-18) is correlated with higher employment is correlated with higher employment likelihood among indigenous workers.likelihood among indigenous workers.

2121


Main Results:Main Results:Controlling for education, experience and Controlling for education, experience and

other individual characteristics:other individual characteristics:

Indigenous workers are more likely to be Indigenous workers are more likely to be employed in lower quality jobs in the employed in lower quality jobs in the informal sector, in agriculture, and as self-informal sector, in agriculture, and as self-employed.employed.

Do social networks play a role?Do social networks play a role?

2222

Determinants of Economic ActivityDeterminants of Economic Activity

Bolivia: Social network effects on Economic Outcomes, 2001By Ethnicity and Area

Outcome Indigenous All Population

URBAN

Employed 0.159 0.189*

Formal employment -0.352* -0.148*

Agriculture 0.151** 0.069***

Self-employed -0.153 0.088

Children attend school 0.110** 0.065***

Modern health services -0.441 0.023

RURAL

Employed 0.008 -0.003

Formal employment -0.083** -0.111***

Agriculture 0.180** 0.178***

Self-employed 0.230*** 0.268***

Children attend school 0.112 0.160***

Modern health services 1.262* 0.391Ethnic group defined on mother tongue. Own calculations based on MECOVI 2001.

2323

Concluding CommentsConcluding Comments

Social networksSocial networks……

……Facilitate employment, but not “quality” Facilitate employment, but not “quality” employment. This result is similar across employment. This result is similar across ethnic lines.ethnic lines.

… … Are positively correlated with children’s Are positively correlated with children’s school attendance.school attendance.

… … Increase access to modern health Increase access to modern health services for the rural, indigenous services for the rural, indigenous population.population.

Role of Economic Role of Economic Opportunities and Social Opportunities and Social

Networks in Bolivia’s Networks in Bolivia’s Indigenous PopulationIndigenous Population

Dante Contreras, Universidad de ChileDante Contreras, Universidad de Chile

Diana Kruger, Univ. Católica de ValparaísoDiana Kruger, Univ. Católica de Valparaíso

Daniela Zapata, ECLACDaniela Zapata, ECLAC

The World BankGeorgetown UniversityCenter for Latin American Studies

role of economic opportunities and social networks in bolivia’s indigenous population dante...

Documents

economic outcomes

nonindigenous workers

role of economic opportunities

lowerquality employment

quality dimension

higherquality jobs

selected countries

rural locations