Ciencias Sociales

QEH Working Paper Series – QEHWPS103

Page 1

Working Paper Number 103 The Standard of Living in Latin America During the Twentieth Century1

Pablo Astorga, Ame R. Bergés and Valpy FitzGerald*
Assessing the economic development of Latin America during the twentieth century requires reliable estimates of living standards, as measured by per capita income, life expectancy, and literacy. Newcomparable series for Latin America suggest that these three indicators made the greatest strides during the period from 1940-80. This progress is probably related to state-led industrialisation, improvements in public health, and urbanisation. Comparison with US levels reveals that, while average per capita income has generally remained steady, relative living standards (measured by a compositewelfare index) have risen gradually as life expectancy in the two regions has converged.

JEL keywords: Economic History, Welfare and Poverty; Demography, Education, Income and Wealth Corresponding author: Dr V. FitzGerald St Antony’s College, Woodstock Road, Oxford OX2 6JF

March 2003

*

Latin American Centre, St Antony’s College, Oxford OX2 6JF

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I.

Introduction

Although per capita incomes in Latin America grew four- fold during the twentieth century, by 2000 the region still ranked as ‘middle- income developing’ by World Bank criteria with relatively low ‘human development’ by UNDP indicators. By contrast, comparable regions such as Southern Europe and East Asia have made considerable more economic and social progress,partic ularly during the second half of the century. While economic and social indicators within Latin America gradually converged over the century, the rates (and volatility) of economic growth changed markedly in different periods. Contested interpretations of this growth experience set the agenda not only for debates among economic historians but for current policy discussions as well. Theassessment of living standards in Latin America during the twentieth century requires reliable estimates of economic and social indicators, particularly of per capita income. Recent studies of the economic history of the region and of long run economic growth in the world as a whole 2 highlight best efforts to provide output series for some countries in Latin America and select social indicators forparticular periods. More recently, the Economic Commission for Latin America and the Caribbean (ECLAC) has published synthesised national output series for the main Latin American economies. 3 Nevertheless, the lack of comparable long run data series of economic and social indicators for the whole region has hampered rigorous assessment of Latin America’s long run experience. The Oxford LatinAmerican Economic History Database (OXLAD) 4 now provides a quantitative basis for the analysis of a wide array of economic and social indicators. The focus in this paper is on per capita income, life expectancy, and literacy, as these are the most relevant of the set of variables that are consistent and available for all countries over the whole century. The data permit a more reliable estimate ofchanges in living standards for the six major economies (Argentina, Brazil, Chile, Colombia, Mexico and Venezuela, or the ‘LA6’) since 1900 and for the remaining 13 countries (‘LA13’) since 1950. 5 The countries that comprise the LA6 are grouped this way for two reasons: first, data coverage for these countries extends the whole of the twentieth century, from 1900 to 2000; and second, these sixeconomies accounted for more than three- fifths of the region’s total output since 1945, and for three-fourths of the region’s total population since 1900. Table 1 offers a general overview of the transition in per capita income, literacy, and life expectancy during the twentieth century. Average incomes in 1970 PPP (international) dollars in the LA6 rose almost five-fold between 1900 and 2000 growing...