Slums are a global concern due to their impact on urban health and urban planning. Although Latin America and the Caribbean is one of the most urbanized developing regions, slums are still a significant concern. However, most studies have concentrated on a single city, using a sample of Latin American and Caribbean (LAC) countries or treating the region as one unit to analyze income inequality and urban primacy. Here, we present an analysis of the relationship between slums and urban primacy for LAC countries for the 1990–2020 period, controlling for GDP per capita and public spending on housing. In addition, we model the relationship between slums and demographic variables such as the fertility rate, migration rate, and urbanization. The analysis is based on panel data from the World Bank and The Economic Commission for Latin America and the Caribbean (ECLAC). During the period of study, a clear positive relationship is evident between urban primacy in the largest city and the slum rate in each LAC country. However, a high level of heterogeneity is observed in this relationship and our model explains the variation in the slum rate within countries better than the variation between countries.