Labor Markets in Latin America: Combining Social Protection with Market Flexibility

By Sebastian Edwards; Nora Lustig Claudia | Go to book overview

Foreword

DURING THE PAST decade, Latin American governments implemented economic reforms that affected almost every sector. Nonetheless, in most countries labor markets remain highly regulated. As of 1997, only a handful of Latin American nations had reformed their labor markets in any significant way, while most continued to rely on labor legislation enacted several decades earlier. This legislation has favored employment protection while taxing employers heavily. Some analysts, business leaders, and policymakers argue that the social protection provided through labor market regulation limits the market's ability to adjust wages and unemployment and is the principal cause of large pockets of "precarious" employment--that is, employment that does not receive any of the benefits and protection awarded by current legislation. Others believe that dismantling existing labor regulations will worsen social conditions and increase poverty and income inequality. Given the importance of this debate, remarkably little empirical research is available on the relationship between labor market regulations and labor market performance in Latin America. The main purpose of this book is to help fill this gap.

Part one of Labor Markets in Latin America examines the relationship between labor market institutions and economic performance in general and as applied to Latin America. Unions and collective bargaining arrangements, minimum wages and poverty, and unemployment insurance schemes are discussed. Part two offers an overview of current labor market regulations and the status of labor reform in the region as a whole, as well as in-depth analyses of the experiences of Argentina, Brazil, Chile, Colombia, and Mexico.

The chapters in this volume are the product of the project on labor market reform in Latin America jointly sponsored by the Brookings Institution and the World Bank. The papers were originally presented at a conference cosponsored by the Brookings Institution, the Instituto and

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