Employment and globalization in Latin America

A significant change towards more open economies, market oriented
growth and less state intervention, took place in nearly all Latin American
experiences in 1975-93. However, the growth of formal employment reaches
the rates of 1950-80 only during the external induced economic boom of
2002-06 –with the exception of Chile and Costa Rica, the only two countries
that overcome the 1950-80 rates before the 2002-06 boom. In spite of the
external boom, the share of low productivity informal employment in the EAP
was in 2005 between 0 and 65 per cent, in all countries excepted Chile
and Costa Rica, where it was lower. These figures are quite higher than the
ones of 1980, an issue that contributes to explain why a significant fraction of
the population do not share the benefits of growth –with the corresponding
political implications. Towards the future, even in an optimistic scenario, the
share of informal employment will remain very high in many countries during
the next 25 years, an issue that point towards the need of active policies to
deal with it.
Norberto E . García
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