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More Work to Do? Taking Stock of Latin American Labor Markets
Author:
Mr. Antonio David
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,
Frederic Lambert
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, and
Mr. Frederik G Toscani
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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 055
Language:
English
Publication Date:
08 Mar 2019
DOI:
https://doi.org/10.5089/9781498302784.001
ISBN:
9781498302784
ISSN:
1018-5941
Pages:
41
Keywords:
WP; unemployment rate; minimum wage; collective bargaining; employment growth; financial crisis; participation rate; Labor Markets; Latin America; Okun’s Law; Informality; institutions data; wage council; low income; unemployment margin; labor market slack; growth rate; wage pressure; terms of trade; indicators in Latin America; employment protection regime; labor markets in Latin America; Unemployment; Labor market institutions; Employment; South America; Central America; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We analyze the performance of labor markets in Latin America since the late 1990s. Strong GDP growth during the commodity boom period led to important gains in employment and a fall in the unemployment rate as labor demand outpaced an increasing labor supply. We emphasize the role of informality in the dynamics of labor markets in Latin America. A re-examination of Okun’s law shows that informality dampens changes in unemployment accompanying output fluctuations. Moreover, we present some evidence that countries with higher redundancy costs and cumbersome dismissal regulations, exhibit “excess” informality over and above what would be expected based on their income and educational levels. Labor market reforms could thus contribute to reducing informality and increasing the responsiveness of labor markets to output growth. However, looking at selected case studies of reforms using the synthetic control method, we find mixed results in terms of labor market outcomes.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2019: Issue 055