Luis Arce was born on 28 September 1963 in La Paz.[2] He was the son of Carlos Arce Gonzales and Olga Catacora, both teachers.[2] Arce grew up in a middle-class family, beginning his school studies in 1968 and graduating high school in his home town in 1980. He studied at the Bank Education Institute in La Paz, initially graduating as an accountant in 1984. In 1991, he received a bachelor's degree in economics from the Higher University of San Andrés before completing his studies abroad at the University of Warwick at Coventry, United Kingdom, where he graduated in 1997 with a master's in economics.