The Strugglers: The New Poor in Latin America?

We identify a group of people in Latin America that are not poor but not middle class either namely "strugglers" in households with daily income per capita between $4 and $10 (at constant 2005 PPP). This group will account for about a third of the region's population over the next decades; as the size and income of the middle class rises, they could become increasingly marginalized. The cash transfers they receive are largely offset by indirect taxes; the benefit of schooling and other in-kind transfers they receive is questionable after adjusting for quality. We discuss implications for the social contract. (C) 2014 Elsevier Ltd. All rights reserved.