Labor Market Reform and Job Creation: The Unfinished Agenda in Latin American and Caribbean Countries (Directions in Development)

This book was written to encourage a call for comprehensive labor market reforms—part of the unfinished agenda that is sometimes called the ''second generation of reforms.'' These reforms are difficult: workers worry that their jobs may be put into jeopardy and, especially in economies where safety nets are inadequate, these concerns are real. Successful labor market reforms must thus be complemented with strengthening of the safety nets and—perhaps most importantly—with macroeconomic policies that sustain robust growth, particularly in the sectors that are likely to give rise to substantial job creation. The kinds of economic policies that some countries have pursued, especially in response to the financial crises of recent years, have led to economic contractions that contribute to a self-defeating and vicious cycle. Without growth, workers are unwilling to accept reforms that have a high risk of condemning them to extended periods of unemployment. But without the reforms, it is hard to generate high growth. Thus, meaningful work on the second generation of reforms— including reforms in the labor market—can only move forward aggressively in an economic climate in which governments commit themselves to sustained expansionary policies, and in which governments demonstrate a sensitivity to the real concerns of the working people. An ambitious agenda lies ahead, but the rewards of pursuing this agenda, with commitment and compassion, will be worth all the efforts devoted to it. We hope that the insights provided by this thoughtful and timely volume by Professor Guasch will provide both encouragement and understanding as countries embark upon these challenges upon which so much of their economic future depends. Despite The Resumption Of Economic Growth In Most Latin America And Caribbean (lac) Countries Since The Late 1980s, Improvements On The Employment/unemployment Front Fave Been Sluggish At Best, With A Few Notable Exceptions. In Many Countries, Renewed Growth In Lac In The 1990s Has So Far Failed To Generate Adequate New Jobs In Place Of Those Lost During The Adjustment, And To Restore Wages To Precrisis Levels. After A Number Of Years Of Relatively High Economic Growth, The Employment Outlook In Many Countries Remains Worrisome. In Those Countries Where Unemployment Rates Appear To Be Low, Often As A Result Of How They Are Measured, The Concern Is The Low Quality And Renumeration Levels Of Available Jobs. Ch. 1. Introduction -- Ch. 2. Unemployment Performance In Latin American And Caribbean Countries During 1990-98 -- Ch. 3. Employment Performance: Continued Mismatch Between Employment Growth And Labor Force Growth -- Ch. 4. Labor Income And Productivity -- Ch. 5. Labor Markets And Institutions In Latin American And Caribbean Countries -- Ch. 6. Factors Affecting Labor Demand -- Ch. 7. Remedies To Address The Employment Issue -- Ch. 8. Evidence Of The Impact Of Labor Reforms -- Ch. 9. Public Policy Implications -- App. 1. An Analysis Of Informality For Mexico -- App. 2. Evidence On Impact Of Labor Market Rigidities, The Role Of Unions, And Economic Performance. J. Luis Guasch. Originally Published Under Title: Reforma Laboral Y Creación De Empleo. Includes Bibliographical References (p. 104-114) And Index. ' ... the relationship between employment growth and output growth ... is greatly affected by the functioning, efficiency and institutional structure of the labor market.' - Joseph Stiglitz, Chief Economist, World BankDespite the resumption of economic growth in most LAC countries since the late 1980s, improvements on the employment/unemployment front have been sluggish at best, with a few notable exceptions. In many countries, renewed growth in LAC in the 1990s has so far failed to generate adequate new jobs in place of those lost during the adjustment, and to restore wages to pre-crisis levels. The focus of this book is on: * the performance of labor markets in the LAC region since the beginning of significant structural reforms most countries in the region have undertaken; * the structure of labor markets, institutions, and incentive structures; * the effects of that structure on employment, earnings, income distribution, and poverty levels; * the role of labor market institutions in labor market trends; * the options for reform and the benefits of comprehensive labor reforms, as evidenced inside and outside the region; * labor policy reforms to improve in a sustainable way the employment/unemployment outlook. Originally published under title: Reforma laboral y creaciâon de empleo.