The annual report Social Panorama of Latin America and the Caribbean 2025 examines the trap of high inequality, low social mobility and weak social cohesion in which the region is mired, and recommends five public policy strategies for overcoming it.

In its annual report Social Panorama of Latin America and the Caribbean 2025: How to escape the trap of high inequality, low social mobility and weak social cohesion, presented today, the Economic Commission for Latin America and the Caribbean (ECLAC) warns that income concentration continues to be extreme in Latin America, since the wealthiest 10% obtains 34.2% of total income, while the poorest 10% only gets 1.7% – although this is just one of the dimensions in which inequality manifests itself in the region, given that it is a structural and multidimensional phenomenon, the United Nations regional organization emphasized.

Although it exhibits a slow downward trend, the average Gini coefficient for Latin America and the Caribbean is the highest of all regions in the world – and is only lower than a subregion of Africa (sub-Saharan Africa) – surpassing that of the Organisation for Economic Co-operation and Development (OECD) by 14 percentage points, according to ECLAC. 

“At ECLAC we have identified seven main factors that generate the trap of high inequality, low social mobility and weak social cohesion, five of which are analyzed in this year’s Social Panorama. In line with this, we propose five strategies for escaping this trap: reduce educational inequality; create quality employment; make progress on gender equality and the care society; address the discrimination against and human rights violations affecting persons with disabilities, Indigenous Peoples and migrants; and continue strengthening the social institutional framework and its financing. Latin America and the Caribbean must redouble its efforts to break free of this trap and fulfill the commitments recently agreed upon at the Second World Summit for Social Development. ECLAC will continue supporting countries through its Regional Conference on Social Development in Latin America and the Caribbean,” stated José Manuel Salazar-Xirinachs, the regional organization’s Executive Secretary, who presented the report at a press conference.

Monetary and multidimensional poverty

The Social Panorama of Latin America and the Caribbean 2025 reports that 25.5% of the Latin American population (162 million people) were living in situations of income poverty in 2024, which represents a decline of 2.2 percentage points versus 2023 and of more than 7 percentage points in comparison with 2020, in the midst of the COVID-19 pandemic. Thus, the incidence of monetary poverty in the region in 2024 marks the lowest figure seen since comparable data exists.

Meanwhile, extreme poverty affected 9.8% of the population (62 million people) in 2024, which is down 0.8 percentage points from the previous year but is 2.1 percentage points higher than the rate registered in 2014, when this indicator reached its lowest level in the past three decades.

The reduction in the proportion of the population living in poverty regionwide in 2024 is mainly attributable to outcomes in Mexico and, to a lesser extent, Brazil. In 2025, ECLAC projects a slight reduction in poverty due to limited prospects for regional growth.

According to the United Nations regional organization’s measurements, there has also been a decline in multidimensional poverty, which went from affecting 34.4% of Latin America’s population in 2014 to 20.9% in 2024, thanks mainly to progress in housing and services. Children and adolescents, as well as residents of rural areas, are more affected by multidimensional poverty. Women also have higher levels of individual deprivation than men: for every 100 men with multidimensional deprivation, there are 122 women in the same situation.

Dimensions of inequality in the region

The Social Panorama of Latin America and the Caribbean 2025 presents a new methodology: the bidimensional index of inequality of opportunity in education for the region, which combines coverage and learning outcomes. Although this index declined in nearly all the region’s countries, Latin America’s average more than doubled that of the OECD in 2022, which creates obstacles for intergenerational social mobility in the region, ECLAC says.

In terms of coverage, the report notes for example that 28% of young people from 20 to 24 years of age had not completed secondary school in 2023 in Latin America, with a gap of 37 percentage points between the highest and lowest income quintiles. In addition, in terms of educational lags and segregation, 71.2% of 15-year-old students did not have basic mathematics skills in 2022 (86.7% in the lowest socioeconomic quartile and 47.3% in the highest one), while 77% of 15-year-old students from the region’s public schools did not achieve the minimum proficiency level in mathematics, versus 46% from private schools (PISA 2022).

That is why one of the strategies that ECLAC suggests for escaping the trap of high inequality, low social mobility and weak social cohesion proposes investing in early childhood; achieving universal secondary education; preventing school dropout; implementing inclusion policies for disadvantaged groups; prioritizing skills development in curricula; and strengthening the role of teachers, among other measures.

The region is also facing an undynamic, segmented and exclusionary labor market, with high levels of informality that affect 47% of the region’s employed persons. Estimates indicate that labor formalization could reduce poverty among the employed (from 14.9% to 8.6%) as well as inequality (from 0.472 to 0.406 in the Gini coefficient for labor income). Therefore, a second strategy for breaking free of this trap is to create quality jobs, combining policies on productive development, the labor market, the labor institutional framework, and social protection and care systems. 

ECLAC also warns that the unequal burden of unpaid work shouldered by young women limits their participation in education, the labor market and the public and political sphere, as well as their time for rest, which is why making progress on gender equality and the care society is another powerful strategy for overcoming the trap of high inequality, low social mobility and weak social cohesion.

Likewise, persons with disabilities, Indigenous Peoples and migrants face greater barriers to accessing education and to labor inclusion. For example, less than 40% of people with disabilities from 15 to 59 years of age are part of the workforce, in comparison with 75% of people without disabilities of the same age.

Social spending in Latin America and the Caribbean

Finally, the publication reports that in 2024 central government social spending amounted to 11.6% of GDP in Latin America, and 11% of GDP in the Caribbean, reaching very similar levels to those seen in 2023.

In the region, public social spending per capita averaged $1,326 dollars in 2024, rising 2.9% versus 2023 and exceeding pre-pandemic levels, but with significant differences between subregions and countries.

In South America, social spending per capita fell by 1.4% on average in 2024, in contrast to the 3.5% increase seen in 2023. In Central America, Mexico and the Dominican Republic, social spending per capita rose by 4.1% on average in 2024, reinforcing the upward trend of 2.6% from 2023, while in the Caribbean there was a significant expansion of social spending per capita in 2024, with a 7% increase.

While the report highlights the strengthening of the social institutional framework (the number of countries with Social Development Ministries rose from 10 to 23 between 1995 and 2025), progress is still insufficient. A key strategy for escaping the trap of high inequality, low social mobility and weak social cohesion is to bolster the technical, operational, political and prospective (TOPP) capabilities of the institutions in charge of countries’ social policies, along with the funding for these policies, ECLAC concludes.