Labor Markets in Latin America Combining Social Protection with Market Flexibility

by Edwards, Sebastian,; Lustig, Nora Claudia

• ISBN13: 9780815721079
• ISBN10: 0815721072
• Format: Paperback
• Copyright: 1997-09-01
• Publisher: Brookings Institution Press

Summary

Many of the rules that govern labor markets in Latin America (and elsewhere) raise labor costs, create barriers to entry, and introduce rigidities in the employment structure. These include the exceedingly restrictive regulations on hiring and firing practices, as well as burdensome social insurance schemes. Such labor market regulations contribute to an over-expansion of precarious forms of employment and to rural poverty, and hinder countries from responding rapidly to new challenges from increased foreign competition. At the same time, other norms can reduce costs and raise productivity; they should be kept in place and their enforcement improved. For example, some occupational health and safety standards lower medical costs and save lives. One may also want to keep legislation aimed at providing a minimum social insurance for unemployment, old age, sickness, and disabilities. In practice, the most common decision that governments confront is not whether to intervene but to choose among different forms of intervention. This volume provides analysts and policymakers with useful insights on this issue. Part I addresses labor market institutions in a broader context, such as collective bargaining arrangements, minimum wages and poverty, and optimal unemployment insurance schemes. Part II analyzes labor market performance in Latin America, the links between performance and labor market regulations, and the status of labor market reform in the region. These questions are addressed for the region as a whole and in great detail for Argentina, Brazil, Chile, Mexico, and Colombia. The book provides a comprehensive description of the existing labor institutions in Latin America, the problems they pose, and the trends in labor market reforms as well as the difficulties encountered by the reform process in specific cases. In addition to the editors, the contributors are Edward Amadeo, Jose Marcio Camargo, Alejandra Cox Edwards, Rene Cortazar, Enrique Davila, Marta Lus Henao, Eduardo Lora, Hugo Hopenhayn, Darryl McLeod, Juan Pablo Nicolini, John Pencavel, and Carola Pessino.

Table of Contents

Introduction	p. 1
Labor Market Regulations, Market Flexibility, and Social Protection
The Legal Framework for Collective Bargaining in Developing Economies	p. 27
Minimum Wages and Poverty in Developing Countries: Some Empirical Evidence	p. 62
Designing an Optimal Unemployment Insurance Program, with Application to Argentina	p. 104
Institutions, Regulations, and Labor Market Reform in Latin America
Labor Market Regulation in Latin America: An Overview	p. 127
Argentina: The Labor Market during the Economic Transition	p. 151
Brazil: Regulation and Flexibility in the Labor Market	p. 201
Chile: The Evolution and Reform of the Labor Market	p. 235
Colombia: The Evolution and Reform of the Labor Market	p. 261
Mexico: The Evolution and Reform of the Labor Market	p. 292
Contributors	p. 328
Index	p. 329
Tables
Urban Unemployment Rates, Selected Latin American Countries, 1989-96
Average Remunerations, Selected Latin American Countries, 1989-96
Poverty and Real Wages: Headcount Poverty Measures
Poverty and Real Minimum Wages, by Region and Growth Phase
Poverty and Real Minimum Wages: Alternative Welfare Measures
Ratios of Nominal Minimum Wages to Poverty Lines, Selected Countries, 1985
Countries and Periods Included in Regressions
Three-by Three Plot of Changes in Poverty, Minimum Wages, and per Capita GDP
Poverty Data
Simulation of an Optimal Unemployment Insurance Contract for Argentina
Dispute Resolution Systems, Ten Latin American Countries, Mid-1990s
Job Protection Legislation, Ten Latin American Countries, May 1992
Growth in Employment, Population, and Labor Force, Selected Regions and Countries
Unemployment Rate, by Age and Gender, Greater Buenos Aires, October 1987-May 1997
Unemployment Rate, by Sector, Greater Buenos Aires, October 1987-May 1995
Unemployment Rate, by Occupation and Education Levels, October 1987-May 1995
Benefit Levels of Wage Earners, by Gender, Greater Buenos Aires
Average Labor Productivity, 1980-93
Dollar Wages, Average Labor Productivity, and Unit Costs
Probability of Unemployment: Linear and Probit Estimates
Hourly Compensation and Labor Costs, Brazil
Hourly Compensation, Manufacturing Production Workers, Selected Countries, 1992
Effect of Preferences on Sectoral Demand
Wage Distribution of Formal and Informal Sector Workers, Brazil
Wage Distribution of Urban Informal Sector Workers, Brazil
Wages and Informality, Brazil, 1983-94
Selected Legal Provisions for Dismissal, France, Germany, and Brazil
Labor Turnover Rates in Formal Labor Market, Brazil, 1985-93
Real Wages and Growth, 1970-94
Employment in Chile, 1970-94
Employment in Chile, Rates of Change, 1970-94
Unionization in Chile, 1970-94
Collective Bargaining in Chile, 1970-94
Cost of Dismissal (as monthly wages)
Main Nonwage Labor Costs (percent of wages)
Average Annual Employment Growth
Composition of the Work Force, by Occupation
Macroeconomic Income and Employment Effects of a 10 Percent Reduction in the Nominal Minimum Wage
Benefits of the Labor Reform (Law 50/90)
Main Remaining Obstacles to Labor Demand
Macroeconomic Income and Employment Effects of Elimination of Payroll Taxes
Determinants of Real Labor Costs in the Manufacturing Sector
Determinants of Labor Survival Rates
Selected Indicators for the Mexican Urban Labor Market
Evolution of the General Minimum Wage
Average Contractual Wage and Average Manufacturing Compensation
Average Income per Hour for Salaried Workers, Fourth Quarter, 1976
Medical Services, Compliance by Firm Size
Figures
Change in Headcount Ratio and Minimum Wage
Change in Headcount Ratio and per Capita GDP
Change in Headcount Ratio and Average Wage
Frequency of Countries in Standard Regression
Frequency of Periods in Standard Regression
Poverty Elasticities
GNP Growth and Unemployment, Argentina, 1985-94
Distribution of Unemployed Workers by Length of Unemployment, Argentina, 1991-94: October Survey
Distribution of Unemployed Workers by Length of Unemployment, Argentina, 1991-95: May Survey
Hazard Rates under Optimal Unemployment Insurance Contract and Current Argentinean Program
Probability of Unemployment over Time under Optimal Unemployment Insurance Contract and Current Argentinean Program
Payroll Taxes as Percent of Gross Wages, Selected Countries, Early 1990s
Secondary School Coverage, Latin America and the Caribbean, 1970-90
Employment Growth, Selected Regions and Countries, 1974-95
Job Creation by Sector, October 1991-May 1995
Urban Unemployment Rates, 1974-95
GNP per Capita, 1974-95
Unemployment Rate, by Gender, October 1987-May 1995
Unemployment Rate, Selected Sectors, October 1987-May 1995
Unemployment Rate, by Occupational Level, October 1987-May 1995
Unemployment Rate, by Educational Attainment, October 1987-May 1995
Unemployment as a Share of Total Employment, 1974-95
Degree of Employment and Educational Attainment, Greater Buenos Aires
Female Labor Force Participation Rates, by Age, October 1987-May 1995
Estimated Probability of Unemployment as a Function of Experience
Estimated Probability of Unemployment as a Function of Experience and Education
Marginal Returns to Education, Males Ages Twenty-five to Sixty-four, Greater Buenos Aires, 1986-May 1995
Income Distribution, Greater Buenos Aires, 1980-95
Real Monthly Earnings, Males Ages Twenty-five to Fifty-four, Greater Buenos Aires, October 1986-May 1995
Real Earnings, by Occupational Level, Males Ages Twenty-five to Fifty-four, Greater Buenos Aires, 1986-May 1995
Real Wages in the Urban Formal and Informal Sectors and in Industry, Brazil, 1983-94
Average Income and Share of Unemployed and Informal Workers, Urban Labor Force, Brazil, 1983-94
Hourly Compensation, Greater Sao Paulo, 1985-94
Hourly Compensation in Competitive Markets
Effect of Workers' Damage Potential on Equilibrium Wage and Equilibrium Demand for Labor
The Determination of the Number of Formal and Informal Workers
Minimum Wage and Average Real Informal Sector Wage, Sao Paulo, 1985-94
Minimum Wages and the Informal Sector, Brazil, 1983-94
Job Security, Measured by Length of Tenure, Selected Countries, Early 1990s
Duration and Frequency of Unemployment, Selected Countries
Unemployment and Real Wages, 1974-94
Labor Costs, Manufacturing Sector
Urban Unemployment and Labor Participation
Evolution of Temporary Employment (Four Cities, 1977-94)
Job Survival Rates (Cumulative)
Job Tenure Expectancy and Employment Growth in Urban Areas
Rates of Unionization
Labor Negotiations (Absolute Figure)
Strikes as a Percent of Labor Negotiations
Wage Income per Hour, Education Level and Firm Size, Men
Wage Income per Hour, Education Level and Firm Size, Women
Percentage of Contributors by Education Level and Age, Men
Percentage of Contributors by Education Level and Age, Women
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