Growth, Employment, and Poverty in Latin America UNU World Institute for Development Economics Research (UNU-WIDER) was established by the United Nations University as its first research and training centre and started work in Helsinki, Finland, in 1985 The mandate of the institute is to undertake applied research and policy analysis on structural changes affecting developing and transitional economies, to provide a forum for the advocacy of policies leading to robust, equitable, and environmentally sustainable growth, and to promote capacity strengthening and training in the field of economic and social policymaking Its work is carried out by staff researchers and visiting scholars in Helsinki and via networks of collaborating scholars and institutions around the world United Nations University World Institute for Development Economics Research (UNU-WIDER) Katajanokanlaituri 6B, 00160 Helsinki, Finland Growth, Employment, and Poverty in Latin America Guillermo Cruces, Gary S Fields, David Jaume, and Mariana Viollaz A study prepared by the United Nations University World Institute for Development Economics Research (UNU-WIDER) Comp by: EElangovan Stage : Revises1 ChapterID: 0003036260 Time:09:54:47 Filepath:d:/womat-filecopy/0003036260.3D Dictionary : OUP_UKdictionary Date:3/3/17 OUP UNCORRECTED PROOF – REVISES, 3/3/2017, SPi Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © United Nations University World Institute for Development Economics Research (UNU-WIDER) 2017 The moral rights of the authors have been asserted First Edition published in 2017 Impression: Some rights reserved This is an open access publication Except where otherwise noted, this work is distributed under the terms of a Creative Commons Attribution-Non Commercial- Share Alike 3.0 IGO licence (CC BY-NC-SA 3.0 IGO), a copy of which is available at https://creativecommons.org/licenses/by-nc-sa/3.0/igo/ It is permitted to reuse, share and adapt this work, subject to the following terms: Attribution - appropriate credit is given to the original work, the copyright holder and creator, and any changes made to the work are properly indicated Non-Commercial - the work, or any adaptation of the work, may not be used, distributed or reproduced in any format, by any means, for commercial purposes Share-Alike - the work, or any adaptation of the work is distributed under the same licence terms as the original, with a URL link provided to the licence Enquiries concerning use outside the terms of the Creative Commons licence should be sent to the Rights Department, Oxford University Press, at the above address or to academic.permissions@oup.com Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2016957034 ISBN 978–0–19–880108–5 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work Foreword The motivation behind this piece of research was cemented during a meeting attended by Professor Gary Fields—one of the co-editors of this book—and myself in mid-2013 where we discussed in depth the linkages between economic growth, changing employment conditions, and the reduction of poverty Gary has been working on the frontier of our profession on employment and development issues all of his academic career, and he pointed to new inroads and data to be explored within the growth–employment–poverty nexus, focusing on Latin America At the time of our exploratory discussions the target date for completion of the UN Millennium Development Goals was looming, with the number one goal—to halve between 1990 and 2015 the proportion of people living on less than dollar a day—having already been achieved The new Post-2015 Development Agenda, since adopted, was under intense debate Leading the charge among the Sustainable Development Goals is the aim to end poverty in all its forms everywhere, followed closely by the SDG to promote inclusive and sustainable economic growth, full and productive employment, and decent work for all Thus the proposed research could not have been more timely for the international agenda And more so as UNU-WIDER was then launching a new research programme—focusing on the three development challenges of transformation, inclusion, and sustainability—wherein work on the growth– employment–poverty nexus was a straightforward fit I hereby express my sincere appreciation of the four editors, Guillermo Cruces, Gary S Fields, David Jaume, and Mariana Viollaz, for bringing this academic work to full fruition, and particularly for their analytical skills brought out so clearly in this book UNU-WIDER gratefully acknowledges the support and financial contributions to its research programme by the governments of Denmark, Finland, Sweden, and the United Kingdom Finn Tarp Helsinki September 2016 Acknowledgements We would like to express our gratitude to UNU-WIDER for its generous support, and especially to its director, Finn Tarp, who encouraged us during the three years we worked on this book We are also grateful to CEDLAS and its director, Leonardo Gasparini, for allowing us access to the SEDLAC database to construct most of the calculations presented in this book Many persons provided helpful comments throughout the process of writing this book They include Leonardo Gasparini for comments on a first draft of this book, and the following colleagues for comments on country-specific chapters: Tim Gindling (Costa Rica), Robert Duval-Hernández (Mexico), José Rodríguez (Peru), and Verónica Amarante (Uruguay) We would also like to thank anonymous reviewers from Oxford University Press and UNU-WIDER whose comments helped us improve our work Participants at the UNUWIDER 30th Anniversary Conference ‘Mapping the Future of Development Economics’, held in Helsinki in September 2015, and the 2015 LACEA Meeting also provided useful suggestions and comments on previous versions of our manuscript A group of excellent research assistants contributed to the bibliographical review They are Ivana Benzaquén, Jessica Bracco, Cynthia Marchioni, and Germán Reyes Guillermo Cruces, Gary S Fields, David Jaume, and Mariana Viollaz Contents List of Figures List of Tables List of Abbreviations Notes on Authors xi xiii xv xvii Part I Introduction to the Volume Introduction and Motivation for the Project Data and Methodology 20 Part II Cross-Country Analysis Changing Labour Market Indicators and the Rate of Economic Growth in Latin America during the 2000s 31 Cross-Country Analysis of the Growth–Employment–Poverty Nexus 55 Within-Country Analysis of the Growth–Employment–Poverty Nexus: Additional Evidence 104 Conclusions from the Cross-Country Analysis 136 Part III Individual Country Analysis Argentina 143 Bolivia 161 Brazil 178 10 Chile 196 11 Colombia 213 12 Costa Rica 232 13 Dominican Republic 250 Panama 00 01 02 03 04 05 06 07 08 09 10 11 12 GDP per capita (dollars PPP 2005) 7,869 7,758 7,776 7,947 8,383 8,819 9,396 10,346 11,192 11,424 12,067 13,154 14,320 Share of agriculture in GDP 7.2 7.7 7.5 7.8 8.0 7.0 6.5 6.0 5.4 5.0 4.7 4.1 3.9 Share of industry in GDP 18.9 16.8 15.8 16.9 18.2 16.6 16.6 16.5 17.8 17.2 16.9 16.7 17.8 Share of services in GDP 73.9 75.5 76.7 75.4 73.8 76.5 76.9 77.5 76.7 77.7 78.4 79.2 78.3 Domestic expenditure (% GDP) 73.1 75.6 79.1 75.9 77.6 75.2 73.3 70.6 66.0 63.9 74.6 74.2 67.7 Public expenditure in education and health (% GDP) 7.6 8.0 8.2 8.2 8.4 8.3 6.4 5.8 6.1 6.7 6.5 6.6 6.2 Public expenditure in social security (% GDP) 2.2 1.8 1.6 1.6 1.4 1.5 1.2 1.8 1.6 3.0 3.1 3.3 3.1 Exports (% GDP) 72.6 72.7 67.5 63.6 67.6 75.5 76.7 81.2 85.2 81.0 76.5 84.2 83.5 Terms of trade 100.0 102.7 101.6 97.2 95.3 93.5 90.8 90.0 85.9 90.0 88.3 86.4 86.2 Foreign direct investment (% GDP) 5.4 4.0 0.8 6.3 7.2 7.1 17.1 9.6 9.9 4.2 8.8 13.2 8.6 Revenue from natural resources (% GDP) 0.0 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.4 0.4 0.5 0.6 Stock of public debt (% GDP) 61.4 65.7 64.7 62.4 65.2 61.0 56.5 49.0 41.4 41.7 39.7 37.9 37.0 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) Peru GDP per capita (dollars PPP 2005) Share of agriculture in GDP Share of industry in GDP Share of services in GDP Domestic expenditure (% GDP) Public expenditure in education and health (% GDP) Public expenditure in social security (% GDP) Exports (% GDP) Terms of trade Foreign direct investment (% GDP) Revenue from natural resources (% GDP) Stock of public debt (% GDP) 00 01 02 03 04 05 06 07 08 09 10 11 12 5,514 8.5 29.9 61.6 84.0 4.4 3.6 16.0 100.0 1.6 2.4 37.4 5,447 8.2 29.6 62.2 85.2 4.4 4.3 15.7 95.6 2.2 1.7 35.7 5,644 7.8 30.4 61.8 83.5 4.5 4.4 16.1 98.4 4.0 1.5 44.7 5,797 7.6 30.8 61.5 83.4 4.5 4.3 17.7 102.2 2.3 2.1 45.4 6,013 7.3 33.0 59.7 80.6 4.5 4.4 21.5 111.3 2.4 4.3 41.9 6,349 7.2 34.3 58.5 78.4 4.5 4.3 25.1 119.4 3.5 7.0 38.4 6,765 7.0 37.0 56.0 72.0 4.3 3.8 28.5 152.1 4.0 13.9 31.4 7,288 7.0 37.0 56.0 70.6 4.4 3.6 29.1 157.6 5.4 14.7 27.4 7,916 7.2 36.6 56.2 72.3 4.7 3.0 27.2 136.6 5.7 12.9 25.6 7,904 7.3 34.2 58.5 75.2 5.4 3.3 23.9 129.1 5.3 9.4 25.2 8,503 6.8 36.1 57.2 71.7 5.0 3.2 25.7 152.5 5.7 12.2 22.9 8,982 7.0 36.6 56.4 70.2 4.9 3.0 28.6 171.9 4.8 14.4 20.1 9,431 7.0 34.6 58.4 71.8 5.3 2.9 25.6 163.7 6.4 11.7 18.9 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) Paraguay 00 01 02 03 04 05 06 07 08 09 10 11 12 GDP per capita (dollars PPP 2005) 10,290 9,739 8,596 9,271 10,019 10,843 11,658 12,556 13,288 13,285 14,376 15,515 15,672 Share of agriculture in GDP 15.8 14.8 14.9 18.3 20.4 19.6 19.1 21.2 23.5 18.9 22.5 21.4 17.4 Share of industry in GDP 35.7 38.0 40.5 37.3 34.6 34.8 33.3 31.7 29.7 32.0 30.1 27.5 28.1 Share of services in GDP 48.5 47.3 44.6 44.4 45.1 45.7 47.6 47.1 46.7 49.0 47.4 51.0 54.5 Domestic expenditure (% GDP) 75.6 74.7 67.5 67.8 70.1 70.8 73.2 74.4 79.1 79.4 80.2 80.7 81.8 Public expenditure in education and health (% GDP) 6.1 4.8 5.4 6.1 6.5 6.6 6.5 8.3 7.6 8.4 10.0 Public expenditure in social security (% GDP) 1.6 3.7 3.4 4.0 5.2 5.2 4.8 6.6 5.4 6.2 7.3 Exports (% GDP) 46.1 44.2 52.9 54.3 53.8 57.3 58.3 56.3 54.3 51.2 54.6 48.9 46.6 Terms of trade 100.0 100.2 96.7 101.4 104.3 97.4 95.5 100.1 107.3 105.0 105.0 107.5 110.5 Foreign direct investment (% GDP) 1.3 1.1 0.2 0.4 0.5 0.1 1.8 0.8 1.4 0.3 1.7 1.8 2.0 Revenue from natural resources (% GDP) Stock of public debt (% GDP) 35.3 33.5 47.0 38.7 34.3 29.3 23.2 15.9 14.3 14.6 14.1 12.1 12.6 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) El Salvador GDP per capita (dollars PPP 2005) Share of agriculture in GDP Share of industry in GDP Share of services in GDP Domestic expenditure (% GDP) Public expenditure in education and health (% GDP) Public expenditure in social security (% GDP) Exports (% GDP) Terms of trade Foreign direct investment (% GDP) Revenue from natural resources (% GDP) Stock of public debt (% GDP) 00 01 02 03 04 05 06 07 08 09 10 11 12 5,155 10.5 31.4 58.1 98.1 27.4 100.0 1.3 0.0 27.2 5,220 10.1 31.9 57.9 99.1 25.8 102.5 2.0 0.0 30.7 5,322 9.1 32.2 58.7 98.3 26.4 101.6 3.3 0.0 35.2 5,425 9.0 31.8 59.2 98.9 27.1 97.7 0.9 0.0 37.2 5,506 9.5 30.4 60.0 101.1 7.0 3.5 27.0 96.8 2.3 0.0 38.1 5,682 10.6 29.7 59.7 102.4 7.1 3.8 25.6 96.8 3.0 0.0 37.5 5,880 10.7 29.1 60.2 103.7 7.4 4.0 25.7 95.5 1.3 0.0 37.7 6,080 11.9 28.2 59.9 106.1 6.9 3.6 25.9 94.6 7.7 0.0 34.9 6,129 12.5 27.7 59.7 107.6 7.0 4.3 26.9 91.9 4.2 0.0 34.4 5,906 12.4 27.0 60.6 102.0 8.1 4.1 23.2 94.9 1.8 0.0 42.6 5,953 12.6 26.7 60.7 103.6 8.0 4.2 25.9 91.3 À0.5 0.0 42.6 6,048 12.5 26.9 60.6 104.3 8.0 4.7 28.0 91.3 0.5 0.0 41.7 6,125 11.8 27.2 61.0 104.4 7.9 4.8 28.4 90.2 1.9 0.0 45.7 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) Uruguay GDP per capita (dollars PPP 2005) Share of agriculture in GDP Share of industry in GDP Share of services in GDP Domestic expenditure (% GDP) Public expenditure in education and health (% GDP) Public expenditure in social security (% GDP) Exports (% GDP) Terms of trade Foreign direct investment (% GDP) Revenue from natural resources (% GDP) Stock of public debt (% GDP) 00 01 02 03 04 05 06 07 08 09 10 11 12 9,551 7.0 24.5 68.5 88.9 6.0 13.2 16.7 100.0 1.2 0.0 31.6 9,168 6.5 24.5 69.0 88.4 6.5 14.1 16.8 104.0 1.4 0.0 38.9 8,457 8.7 24.3 67.0 85.7 6.6 14.5 20.6 102.6 1.4 0.0 96.0 8,530 11.1 26.1 62.8 81.7 6.4 12.8 27.4 103.5 3.5 0.0 95.5 8,962 12.9 25.6 61.5 79.8 6.2 11.7 32.1 99.9 2.4 0.1 74.7 9,626 10.4 27.1 62.5 80.4 6.3 11.7 30.4 90.7 4.8 0.1 66.7 10006 10.7 26.4 62.9 81.9 6.9 11.8 30.3 88.6 7.7 0.1 61.6 10634 10.2 27.2 62.6 81.5 7.4 12.9 29.1 88.7 5.8 0.1 52.9 11361 10.9 25.8 63.3 81.6 8.7 11.7 30.2 94.1 7.1 0.1 51.6 11577 8.4 25.6 66.0 79.6 9.6 12.0 28.3 96.9 5.3 0.1 46.7 12569 7.9 26.1 66.0 80.6 9.8 12.2 27.2 100.0 5.6 0.1 40.9 13344 9.4 23.9 66.8 81.4 10.5 11.1 27.2 101.8 5.7 0.1 40.3 13821 8.4 24.7 66.9 82.3 26.3 104.2 5.4 0.1 39.2 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) Venezuela 00 01 02 03 04 05 06 07 08 09 10 11 12 GDP per capita (dollars PPP 2005) 9,527 9,667 8,650 7,835 9,104 9,869 10,658 11,396 11,799 11,237 10,894 11,173 11,623 Share of agriculture in GDP 4.2 4.5 4.1 4.6 4.0 4.0 4.0 4.1 4.4 6.1 5.8 9.4 8.4 Share of industry in GDP 49.7 46.1 49.8 51.6 55.5 57.8 56.5 53.3 54.1 44.2 52.2 23.9 24.7 Share of services in GDP 46.1 49.4 46.1 43.9 40.5 38.2 39.5 42.6 41.5 49.7 42.1 66.8 66.9 Domestic expenditure (% GDP) 64.2 69.1 66.5 67.7 61.2 57.8 58.7 63.6 63.4 76.6 67.1 66.7 71.5 Public expenditure in education and health (% GDP) 8.5 9.3 9.6 8.8 9.9 9.0 10.7 10.8 9.9 9.8 8.7 9.9 10.5 Public expenditure in social security (% GDP) 3.8 5.0 4.3 5.9 5.8 5.7 7.5 7.7 6.8 6.9 7.1 8.7 9.2 Exports (% GDP) 29.7 22.7 30.4 33.9 36.2 39.7 36.5 31.1 30.8 18.1 28.5 29.9 26.2 Terms of trade 100.0 82.2 87.6 98.7 118.1 154.4 184.4 202.1 249.5 181.7 215.9 259.5 262.1 Foreign direct investment (% GDP) 4.0 3.0 0.8 2.4 1.3 1.9 0.1 1.1 0.4 À0.8 0.5 1.2 0.6 Revenue from natural resources (% GDP) 28.0 22.3 26.8 32.7 39.3 47.5 43.9 34.4 34.9 18.8 20.3 33.7 28.6 Stock of public debt (% GDP) 28.1 31.2 41.7 47.4 38.8 33.1 24.0 19.1 14.0 18.2 32.0 25.1 27.5 Source: Authors’ calculations based on World Development Indicators (World Bank 2014) and CEPALSTAT (UN-ECLAC 2015) Appendix References UN-ECLAC (2015) CEPALSTAT, United Nations, Economic Commission for Latin America and the Caribbean Available at , accessed April 2015 World Bank (2014) World Development Indicators Available at , accessed April 2014 492 Index As most chapters pertain to a particular country, the sub-headings for each country have not been double-entered under main entries agriculture 10, 24, 61, 70–3 annualized change 453–4 Alvaredo, F 9, 105, 110, 115–16 Araujo, M C 277 Argentina 4, 143–58, 398 cash transfers 145, 155 countercyclical policies 48, 145 currency devaluation 155–6 debt default 145 domestic crisis 110 economic growth 14, 144–6, 157 economic sector employment 150 educational level 150–1, 153–4 fiscal policy 156 growth elasticities 109–10 growth indicators 148–9 household surveys 143–4 industry 145 inequality 155 international crisis 45, 51, 150–2, 154, 157–8 labour earnings 152–7 labour GICs 129, 131, 133 labour market indicators 148–9, 157–8, 435 labour unions 156 macroeconomic variables 476 minimum wage 153 occupational positions 147 pensions 155, 156 poverty 154–5, 157–8 poverty elasticities 121 public sector employment 146 recession 144–5, 153–4 recovery 146 social expenditure 48, 145–6 social security registration 152 social security system 151–2 taxes 156 unemployment 97, 146–7 women workers 158 young workers 150, 158 Atkinson, A B 136 Azevedo, J P 156–7, 192, 209, 228, 246, 264, 298, 316, 353, 372, 412 Barros, R 191–2 Battistón, D 157, 192 Beccaria, L 8, 92 Bergolo, M 156, 191 Boada, A J 431 Bolivia 4, 161–75 cash transfers 169, 173–4 countercyclical policy 165 debt 162, 165 economic growth 61, 162–5 economic sector employment 168, 171 educational level 168–9, 171–2, 174 exports 78 financial system 165 fiscal policy 174 growth elasticities 109, 111, 113–14 growth indicators 163–4 Hydrocarbon Law 162 hydrocarbons 173 inequality 173–4 international crisis 51, 167–8, 170, 172, 175 labour earnings 170–2 labour GICs 129, 131, 133 labour market indicators 11, 163–4, 175, 436 macroeconomic variables 477 minimum wage 171, 174 national surveys 161–2 occupational groups 166–7, 171 occupational positions 167–8 pensions 169 poverty 172–3 poverty elasticities 121, 122–7 remittances 162 social security registration 169–70 social security system 169, 173 social spending 174 unemployment 165–6 young workers 167–8 Bourguignon, F 136 Brambilla, I 128 Brazil 4, 178–93 cash transfers 187, 190–1 countercyclical policies 183 Index Brazil (cont.) currency devaluation 162, 179, 398 debt 183 demographic transition 188 economic growth rate 14, 61, 179–83 economic sector employment 186, 189 educational level 186–7, 189, 192 exports 162, 183 GDP volatility 179, 183 Growth Acceleration Program 179, 183 growth elasticities 109, 111, 113–14 growth indicators 180–3 inequality 191–2 international crisis 51, 184–6, 190, 193 labour earnings 188–90 labour GICs 130, 132 labour market indicators 11, 180–3, 192–3, 437 macroeconomic variables 478 national surveys 178–9 occupational groups 184–5 occupational positions 185 poverty 190–1 poverty elasticities 121, 122–7 price stabilization 183 social security registered 187–8 social security system 187 unemployment 183–4 women workers 189, 193 young workers 189, 193 Campos, R 334 Canavire-Bacarreza, G 174 cash transfers, conditional (CCT) 9, 13–14, 48, 53 Chacaltana, J 388 Chile 4, 51, 196–211 cash transfers 208 economic growth 197–200 economic sector employment 202–3, 206–7 educational level 203–4, 206–7, 209 external shocks 197 growth elasticities 109–11 growth indicators 198–9 household survey 196–7 inequality 208–9 inflation 208 international crisis 202–3, 205, 207, 210 labour earnings 205–7 labour GICs 130, 132 labour market indicators 198–9, 210–11, 438 Law of Subcontracting 205 macroeconomic variables 479 occupational groups 201, 206–7 occupational positions 201–2, 206–7 policy framework 197, 200 poverty rate 207–8 494 poverty/earnings elasticities 121 social security registered 204–5 social security system 204 unemployment 200 women workers 202, 210–11 young workers 202, 210–11 Chinese textiles 290, 293 Cho, Y Colombia 4, 213–30 countercyclical policies 218 economic growth 214–18 economic sector employment 221–2, 225 educational level 222–3, 225–6, 228 emigration 227 financial and banking crisis 214 growth elasticities 109 growth indicators 215–17 health scheme 224 inequality 227–8 international crisis 51, 220–2, 226, 229 labour earnings 225–6, 228 labour GICs 129, 131 labour market indicators 215–17, 228–30, 439 macroeconomic stability 218 macroeconomic variables 480 minimum wage 219, 225 mining and hydrocarbons 214, 221 nationwide surveys 213 occupational groups 219–20, 225 occupational positions 220–1 pension scheme 223–4, 228 poverty rates 226–7, 229 poverty/earnings elasticities 121 remittances 214, 227 social security registration 223–4 social security system 223–4 unemployment rate 97, 218–19, 229–30 women workers 229–30 young workers 229–30 Contreras, D 209 Cornia, G A 9, 334 Costa Rica 4, 232–48 agriculture 236 cash transfers 236, 245 countercyclical policies 48 economic growth 15, 233–6 economic sector employment 239–40 educational level 240–1, 243–4 exports 233, 236 fiscal stimulus plan 236 foreign direct investment 233, 236 growth elasticities 109 growth indicators 234–5 inequality 245–7 interest rates 233 international crisis 233, 237–42, 244, 246–7 Index labour earnings 242–4 labour GICs 129, 131, 133 labour market indicators 234–5, 247–8, 440 macroeconomic variables 481 nationwide surveys 232–3 occupational groups 237–8, 247 occupational positions 238–9 offshore activities 239–40 poverty rate 244–5, 245–6 poverty/unemployment elasticities 121 services 78 social security registration 241 unemployment rate 97, 236–7, 247–8 women workers 247–8 young workers 238–40, 247–8 countercyclical policies 15, 48, 53 Cruces, G 144, 156, 162, 179, 197, 214, 233, 251, 269, 287, 303, 321, 341, 358, 378, 398, 418 Céspedes Reynaga, N 391 Damill, M 62, 115 data sources 24 CEDLAS ECLAC-ILO 8, 34, 43, 91–2 household surveys 4, SEDLAC 4, 8, 20–1 decomposition studies 6, 8, 91–2 domestic consumption 61, 70–3, 459–60 domestic crisis 110, 265, 433 Dominican Republic 4, 250–66 banking crisis 254, 257–8, 265–6 countercyclical policies 254 economic growth 15, 251–4 economic sector employment 257–8 educational level 258–9, 261 export-oriented growth model 251 growth elasticities 109, 111–12, 114 growth indicators 252–3 household surveys 250–1 inequality 263–4 international crisis 254–9, 261–3, 265 labour earnings 260–2 labour force age structure 264 labour GICs 130, 132–3 labour market indicators 252–3, 264–5, 441 macroeconomic variables 482 minimum wages 261 non-tradeable sector 254 occupational groups 255–6 occupational positions 256–7 poverty rates 262–3 poverty elasticities 121, 122–7 public debt 254 remittances 263 social programmes 263 social security registration 259–60 social security system 259–60 unemployment 254–5, 259 workers bargaining power 261 young workers 265–6 earnings see labour earnings economic growth see GDP per capita; growth Ecuador 4, 268–84 agriculture 276 cash transfers 276–7, 281–2 dollarization 272 economic growth 269–72 economic sector employment 275–6, 279–80 educational levels 276–7, 279–80, 282 exports 272, 276 external shocks 269 Fiscal Responsibility and Transparency Law 269 growth indicators 270–1 inequality 281–2 internal debt 272 international crisis 272–8, 280, 283–4 labour earnings 278–80 labour GICs 130, 132 labour market indicators 270–1, 283–4, 442 labour policies 278 macroeconomic variables 483 nationwide surveys 268–9 occupational group 273–4, 279 occupational position 274–5, 279 oil sector 275, 279 poverty rate 280–1 remittances 272, 281 social security registration 277–8 social security system 277 unemployment 273 wage policy 279 women workers 274, 283–4 young workers 274, 277, 283–4 education expenditure on 10, 24, 62, 70, 78 annualized change 461–3 educational level 8, 22–4, 34 convergence 67 definition 23 and employment 87, 97–8 general improvement 39, 52, 91 and poverty 98 El Salvador 4, 286–300 agriculture 287, 290 dollarization 287 economic growth rate 15, 34, 61, 287–9 economic sector employment 293, 296 educational level 293–4, 296–7, 299 fiscal measures 290 government transfers 298 495 Index El Salvador (cont.) growth elasticities 109, 111 growth indicators 288–9 inequality 298–9 international crisis 287, 290–5, 297–300 labour earnings 295–7 labour GICs 129, 131, 133 labour market indicators 288–9, 299–300, 448 macroeconomic variables 489 minimum wages 296 nationwide surveys 286–7 occupational group 291–2 occupational position 292, 296 poverty rate 297–8 remittances 287, 298 shocks 287 social security registration 295 social security system 294–5 unemployment 97, 290–1 young workers 292, 294, 300 elasticities 104–39 computation 106 earnings/growth 106–9 employment/growth 106–9 inequality/growth 110–15 the literature 115 poverty/earnings 99, 116–21 poverty/growth 99–100, 105, 110–15 poverty/occupational position 121–2 poverty/unemployment 99, 121 self-employment/growth 106 employers see occupational position employment 60, 90 by occupation 39–40 by sectoral composition 8, 23, 34, 39, 52, 87 channel 5–7 definitions and earnings 138–9 elasticities 106–9 findings 12 and poverty 91–101 quality indicators 34 and wages 47 see also growth–employment–poverty nexus Esquivel, G 334 exports 24, 61, 70–3, 78, 101 annualized change 465–6 Ferreira, F H G 190 Ffrench-Davis, R 209 Fields, G 3, fiscal resources 9, 13, 15, 78 foreign direct investment 24, 61, 70–3, 78, 469 annualized change 469–70 Fosu, A K 105, 110, 115–16 Frenkel, R 62, 115 496 Galiani, S 349 Gallo, C R 431 García Carpio, J M 391 Gasparini, L 9, 105, 110, 115–16, 156, 192, 228, 246, 282, 299, 316, 353, 372, 412, 431 GDP per capita by country 34–42 convergence or divergence 62 initial 62–7 and labour market indicators 31–53, 78–83 rising 104 see also growth Gillingham, R 315 Gindling, T H 315 Gini of household per capita income (HPCI) 24, 110–11 see also inequality; poverty Gini of labour earnings (LI) 24, 110–11 see also inequality; poverty growth annualized rates 35 definitions elasticities 100, 104–15 findings 11–12 initial conditions 138 and labour market indicators 57–61, 137 Latin America/OECD comparison 13 negative 42–3 recent 14–15 and tax revenues and welfare improvement 56–7 see also GDP per capita; growth– employment–poverty nexus growth incidence curves (GICs) 127–33, 139 growth–employment–poverty nexus analytical framework 5–7 cross-country analysis 55–102 during the crisis 47–8 elasticities 104–39 the literature 7–10, 55–6 questions and findings 10–12 see also employment; growth; poverty health employment in 23 expenditure on 10, 24, 41, 62, 70–1, 78 public expenditure data 461–3 Herrera, R 209 Honduras 4, 51, 302–18 cash transfers 315 coffee prices 303 countercyclical policies 48 economic sector employment 309–10 educational level 310–11, 313–14, 316 fiscal adjustment 303, 306 growth 15, 61, 303–6 growth elasticities 109, 111–12, 114 Index Hurricane Mitch 315 inequality 316–17 international crisis 306–18 labour earnings 312–14 labour GICs 129, 131, 133 labour market indicators 304–5, 317–18, 443 macroeconomic variables 484 military coup 306 minimum wage 307, 312, 317 nationwide surveys 302–3 occupational groups 307–8 occupational positions 308–9 pensions 315 poverty elasticities 121, 122–7 poverty rate 11, 314–15 PRAF programmes 315 remittances 303, 306, 315 social security registered 311–12 social security system 311 unemployment 306–7 young workers 308, 313, 318 Inchauste, G 8, 92 industry 10 annualized change 457–8 increasing share 78 and labour market conditions 61, 101, 138 methodology 23–4, 70 inequality 22, 24, 41, 62, 136–7, 138 cross-country comparisons 12–14 elasticities 110–15 indicators 21–2 OECD 31 and poverty 100–1 reduction in United States INTEL 233 international crisis 11, 42–53, 136–7 post-crisis recovery 43–4, 48–52, 137 International Labour Organization (ILO) 5, 9, 22, 56 Jaramillo, M 393 job mix 60, 109 improvement 39, 41, 87, 97 indicators 10 and poverty 97–8 see also occupational composition Kakwani, N 391–2 Kaldewei, C 55 Katz, L 282 labour earnings 60 average 40–1 distribution 127–33 elasticities 106–9, 116 and employment 138–9 findings 12 labour market indicators 88–90 and poverty 91–101 rising 104 see also wages labour market indicators 11, 21–4 annualized changes 65–6 by country 34–42 convergence or divergence 67–9 direction of change 74–5 during the international crisis 45–6, 49–50 evolution over time 35–9 and GDP per capita growth 31–53, 78–83, 137 initial conditions 63–9, 138 and the international crisis 42–52 and labour earnings 88–90 and macroeconomic indicators 70–83, 452–74 relationship between 83–91 welfare-improving direction 41–2, 56–7, 64 welfare-worsening direction 47 labour markets impact of Great Recession 44–7 importance of Larrañaga, O 209 Latin America compared to OECD 13 impact of international crisis 43–52, 136–7 labour market indicators 2000s 31–53 post-crisis recovery 43–4, 48–52, 137 Lopez-Calva, L F 128, 329, 334 Lustig, N 9, 128 López Calva, L macroeconomic indicators 20 direction of change 74–7 and labour market indicators 26, 61, 70–83, 101, 452–74 macroeconomic variables data sources 24 external 138 notation 25 Maurizio, R 192 Mayorca, R 431 Mercosur 368 methodology 25–6 analytical framework 5–7 see also data sources Mexico 4, 320–36 cash transfers 324, 329, 333–5 countercyclical policies 48 crisis 324 depreciation 324 economic sector employment 327–8 educational level 328–9, 332, 335 497 Index Mexico (cont.) growth 11, 15, 34, 61, 321–4 growth elasticities 109, 111 growth indicators 322–3 inequality 334–5 international crisis 321, 324–5, 327–32, 334–6 labour earnings 330–2 labour GICs 129, 131, 133 labour market indicators 322–3, 335–7, 444 macroeconomic variables 485 nationwide surveys 320, 326 occupational groups 326 occupational positions 327 oil production 324 poverty rate 332–3 poverty/earnings elasticities 121 public spending 334 remittances 324, 334 social security registration 329–30 social security system 329–30 stimulus package 324 unemployment 97, 325 young workers 331, 336–7 minimum wage 8, 14, 34, 91 Murphy, K 282 Naranjo Bonilla, M 281 natural resources 10, 24, 62, 70, 73, 78, 101, 138 revenues from 473–4 North American Free Trade Agreement (NAFTA) 321, 334 occupational composition 21–2 occupational group, definition 22–3 occupational positions 52, 87, 97–8, 121–2 by country 39–40 definition 23 see also unpaid worker; wage/salaried employee; self-employment OECD compared to Latin America 13 Employment Outlook GDP per capita growth 31 negative growth 42–3 registered workers 31 Olinto, P 115–16 Oosterbeek, H 277 Ortiz-Juarez, E 128 Osorio Amezaga, M J 383 Osueke, A I 62, 128 Oviedo, L A 246 Pagés, C 8, 55 Panama 4, 340–54 cash transfers 352 Colon Free Trade Zone 341 498 economic sector employment 346–7 educational 347–8, 350–1 government transfers 352 growth 11, 15, 34, 60, 341–4 inequality 352–3 international crisis 341, 344–9, 351–4 labour earnings 349–51 labour GICs 130, 132 labour market indicators 11, 342–3, 354, 445 macroeconomic variables 486 nationwide surveys 340 occupational group 345–6, 350 occupational position 346, 350 Panama Canal 341 poverty elasticity 352 poverty rate 351–2 services 78 social security registration 349 social security system 348 unemployment rate 97, 344 young workers 347, 349 Paraguay 4, 357–75 countercyclical policies 362 drought 362 economic growth 358–62 economic sector employment 365–6 educational level 366–7, 369–70 external shocks 358 growth elasticities 109 inequality 371–2 internal crisis 358 international crisis 51, 362–74 labour earnings 368–70 labour GICs 129, 131 labour market indicators 359–61, 373–4, 447 macroeconomic variables 488 nationwide surveys 357 occupational compositions 363–4 occupational positions 364–5, 369 poverty rate 370–1 poverty elasticities 121 public transfers 371 social security registered 367–8 social security system 367 soybean production 362 terms of trade 358 unemployment rate 362–3 young workers 363, 365–7, 374 pensions 6, 24, 48 Pernia, E 392 Peru 4, 51, 377–94 countercyclical policies 382, 394 economic sector employment 385–6, 390–1 educational level 386–7, 390–1 exports 78, 378, 382 Fiscal Responsibility and Transparency Law 382 Index growth 11, 34, 60, 378–82 growth/poverty elasticity 392 inequality 392–3 international crisis 382–7, 389–94 labour earnings 389–91 labour GICs 130, 132 labour market 11 labour market indicators 379–81, 393–4, 446 macroeconomic variables 487 National Tax Authority 388 nationwide surveys 377 occupational groups 383–4, 390–1 occupational positions 384–5, 390–1 poverty rate 391–2 poverty/unemployment elasticities 121 small enterprises 387–8 social security registered 387–9 social security system 387 tax revenues 382 terms of trade 378 unemployment rate 382–3 unemployment/output elasticity 383 women workers 394 young workers 383–4, 386, 389, 394 Pierre, G 8, 55 Pochmann, M 190 political conditions, cross country comparisons 13–14 poverty rate 22–4, 41, 60, 138 definitions and earnings 91–101 and educational level 98 elasticities 99, 105, 110–22 and employment 91–101 falling 104 findings 11–12 and inequality 100–1 international crisis 53 and job mix 97–8 OECD 31 and self-employment 98, 114, 134, 137–8 see also Gini of household per capita income (HPCI); Gini of labour earnings (LI); growth–employment– poverty nexus public debt 62, 70–3 annualized change 471–2 Rios-Avila, F 174 Roberts, K 13 Russia 378 Saavedra, J 393 Sauma, P 246 Scarpetta, S 8, 55 Schady, N 277 self-employment 5, 22–4, 34 decrease in 73, 106 elasticities 106, 109, 122, 127 and growth 55–6 increase in 40, 44, 53 and poverty 98, 114, 134, 137–8 services 10, 23–4, 61, 72–3, 78, 101 annualized change 455–6 Soares, S 191 social programmes 5–6, 9, 13–15 social security expenditure 24, 41, 62, 70–3, 78 annualized change 463–4 social security registration 22 data sources 23 elasticities 109, 122 and growth 60 increase in 31, 40, 52 previous literature 8–10, 34 Son, H 392 Stiglitz, J E 4, 136 Tarp, F tax revenues 6, 62 terms of trade 15, 61–2, 70–3, 138 annualized change 467–8 Terrell, K 315 Tortarolo, D 128 Trejos, J D 246 Tsounta, E 62, 128 unemployment rate 21–2, 60, 62, 138 by country 39–40 elasticities 121 falling 104 impact of Great Recession 44 Latin American 34 OECD 31 United Nations Economic Commission for Latin America and the Caribbean (UN–ECLAC) 20, 24 Sustainable Development Goals (SDGs) UNU-WIDER 3–4 United States growth 31, 43, 321 growth–employment–poverty record 4, 12–14 inequality levels 136–7 unpaid family workers 40, 60, 101 convergence 67 elasticities 109 methodology 22–4 OECD 31 reduction 73 Urrutia, P C C 393 Uruguay 4, 397–414 domestic crisis 110 economic sector employment 404, 409 499 Index Uruguay (cont.) educational level 405–6, 409 external shocks 398 growth 398–401 growth elasticities 109–11 inequality 411–12 international crisis 51, 401–7, 409–14 labour earnings 408–10 labour GICs 130, 132–3 labour market indicators 399–400, 412–14, 449 macroeconomic variables 490 nationwide survey 397 occupational groups 402–3, 408–10 occupational positions 403–4, 409 PANES 411 poverty elasticities 121 poverty rate 410–11 social security registration 407 social security system 406–7 stabilization policy 398 unemployment 97, 401–2 women workers 414 young workers 404, 414 Venezuela 4, 218, 417–33 countercyclical policies 422 domestic crisis 110, 433 economic sector employment 425–6 educational level 426–7, 428–9 fiscal policy 418 growth 14, 34, 418–22 growth elasticities 109–10 inequality 431 international crisis 422–7, 429–33 labour earnings 428–9 labour GICs 130, 132 500 labour market indicators 419–21, 432, 450 macroeconomic variables 491 nationwide surveys 417 occupational groups 423–4 occupational positions 424–5 oil sector 418, 422 poverty elasticities 121 poverty rate 430–1 social security registration 427–8 social security system 427 unemployment 97, 422–3 women workers 433 young workers 423–6, 433 Vidal Bermúdez, A 388 wage/salaried employees 22–4 annualized changes 90–1 elasticities 106, 109 and exports 73, 78 fall in 40, 44 and growth 60, 137 post-crisis 48, 52 and poverty 98, 114, 122, 127, 134 previous literature 8, 34, 55–6 wages 6, 87 and employment 47 minimum 8, 14, 34, 91 rising 34, 43, 62, 92 skill premium stagnant 13 see also labour earnings Weller, J 7, 55, 106 World Bank 43, 62, 92, 105, 128, 383, 388 World Development Indicators (WDI) 20, 24 World Development Report 2013 Yamada, G 388, 393 ... training centre and started work in Helsinki, Finland, in 1985 The mandate of the institute is to undertake applied research and policy analysis on structural changes affecting developing and. .. growth–employment poverty nexus in Latin America during the 2000s Her research is focused on labour and development economics in Latin America and the Caribbean Part I Introduction to the Volume Introduction... economic growth, full and productive employment, and decent work for all This book examines the links between economic growth, changing employment conditions, and the reduction of poverty in Latin America