More Work to Do? Taking Stock of Latin American Labor Markets

David, Antonio; Lambert, Frédéric; Toscani, Frederik

doi:10.5089/9781498302784.001

Cited by 11 publications

(23 citation statements)

References 24 publications

(34 reference statements)

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“…Not all labor market flows emerging from crises are job losses. In Latin America in particular, the significant informal sector dampens the Okun's Law relationship between GDP growth and unemployment (David, Lambert, and Toscani 2019). Fully characterizing the quantitative margin of adjustment during slowdowns in these economies thus requires going beyond unemployment dynamics.…”

Section: Informalitymentioning

confidence: 99%

Employment in Crisis: The Path to Better Jobs in a Post-COVID-19 Latin America

Silva¹,

Sousa²,

Packard³

et al. 2021

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This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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Section: Informalitymentioning

confidence: 99%

Employment in Crisis: The Path to Better Jobs in a Post-COVID-19 Latin America

Silva¹,

Sousa²,

Packard³

et al. 2021

View full text Add to dashboard Cite

show abstract

“…However, taking advantage of the heterogeneous panel data approach used in parts of the paper, the results show large differences across LAC. The strong cyclical response of informality is associated to the findings of David, Lambert and Toscani (2019), who show that the elasticity of unemployment to changes in GDP growth, the Okun coefficient, is lower in countries with higher levels of informality. That finding, together with the counter-cyclical nature of informality documented in this paper, show that the informal sector acts as a buffer to mitigate the labor market impact of shocks to GDP growth.…”

Section: Introductionmentioning

confidence: 89%

“…( Labor market regulations and taxes are important determinants of the level of informality. David, Lambert, and Toscani (2019) study this issue in a multivariate regression setting that controls for the level of real GDP per capita and the level of education, variables that are deemed to be important determinants of informality in the literature, as well as other indicators of labor market institutions. These authors find that redundancy costs and a variable capturing whether a thirdparty approval is required to dismiss workers are significantly correlated with informality levels.…”

Section: The Cyclical Properties Of Informality and Its Link To mentioning

confidence: 99%

“…The estimated relationship between the speed of adjustment and informality highlights the nuanced interactions between different labor market outcomes. For example, higher informality appears to act as a buffer and attenuate the impact of shocks to GDP on unemployment (David, Lambert, and Toscani, 2019), but it also makes the adjustment process more protracted.…”

Section: Fixed Effects Estimationmentioning

confidence: 99%

“…Informality declined in LAC labor markets but continues to be a feature of roughly half the level of employment in the region (Kugler, 2019 andWorld Bank, 2019). Evidence suggests that informality is driven by income per capita and education of the labor force (La Porta and Shleifer, 2014), but also by strict labor regulations and taxation (Finkelstein Shapiro, 2015, David, Lambert andToscani, 2019). Indeed, labor markets in LAC exhibit regulatory rigidities in several key dimensions.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Labor Market Dynamics, Informality and Regulations in Latin America

David¹,

Pienknagura²,

Roldós³

2020

IMF Working Papers

Self Cite

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Labor markets in Latin America and the Caribbean (LAC) are characterized by high levels of informality and relatively rigid regulation. This paper shows that these two features are related and together make the speed of adjustment of employment to shocks slower, especially when regulations are tightly enforced. Evidence suggests that strict labor market regulations also have an adverse effect on medium-term growth. While both regulations on prices (minimum wages) and quantities (employment protection) decrease the speed of adjustment to shocks, they appear to be binding in different phases of the cycle—the former affects mostly the (net) job creation margin and the latter the (net) job destruction margin. The results also highlight possible interactions between labor market regulations and the effectiveness of macro-stabilization tools—including exchange rate depreciation.

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Institutional change and political conflict in a structuralist model

Porcile

Sánchez‐Ancochea

2021

Cambridge Journal of Economics

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External conditions have historically influenced economic outcomes and have also impacted political institutions in developing countries. Focusing on these changes, this article develops a theoretical model of political conflict and democratic stability in a small open developing economy, using as the basis a structuralist macroeconomic model. In this model, political institutions are given in the medium run but vary in the long run as a result of political conflict between capitalists, formal workers, and informal workers excluded from the benefits of social protection. The model suggests that a democratic breakdown is more likely the larger the informal sector, the lower the structural competitiveness of the economy, and the weaker the country’s democratic tradition. The model also links the possibility of coups and democratization process with external shocks. Based mainly on the Latin American experience in democratic and dictatorial regimes, the article claims that combining industrial and technological policies—which ease the Balance-of-Payments constraint—with the building of a comprehensive system of social protection is key for the consolidation and stability of democracy.

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More Work to Do? Taking Stock of Latin American Labor Markets

Cited by 11 publications

References 24 publications

Employment in Crisis: The Path to Better Jobs in a Post-COVID-19 Latin America

Employment in Crisis: The Path to Better Jobs in a Post-COVID-19 Latin America

Labor Market Dynamics, Informality and Regulations in Latin America

Institutional change and political conflict in a structuralist model

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