The Growth-Employment-Poverty Nexus in Latin America in the 2000s Guillermo Cruces Gary S. Fields CEDLAS-FCE-UNLP, CONICET and IZA Cornell University, IZA and WIDER David Jaume Mariana Viollaz Cornell University and CEDLAS-FCE- CEDLAS-FCE-UNLP UNLP
Motivation • Interest in the links between growth, employment, and poverty. • Main questions: o Has economic growth resulted in economic development via improved labor market conditions in the 2000s? o Have these improvements halted or been reversed since the Great Recession of 2008? o How do the rate and character of economic growth, changes in the various employment and earnings indicators, and changes in poverty and inequality indicators relate to each other?
Our outputs • 18 working papers: o 16 country papers o 2 cross-country papers • To appear as WIDER working papers • To be collected into a book
Brief summary of LA findings • For the region as a whole: real GDP pc grew during the 2000s, all employment and earnings indicators improved, and poverty and inequality fell. • For individual countries: real GDP pc grew during the 2000s in all LA countries, most LMI improved in all countries but one , poverty rates fell in all countries but one . • Huge contrast with U.S. and other OECD countries.
Data and Methodology
Data sources • Microeconomic data from SEDLAC (CEDLAS and World Bank) for 16 countries, from 2000 to 2012/2013: o More than 150 household surveys, 5 million households and 18 million people. o Comparable time series for a wide range of labor market, poverty and income inequality indicators. • Aggregate macroeconomic indicators from WDI (World Bank) and data on social expenditure from ECLAC (United Nations).
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Labor market indicators and Evaluation criteria Change from Welfare improving Labor market indicators (Y ik ) initial to final year change Employment and earnings indicators Unemployment rate ∆Y ik Reduction Shr of low-earnings occupations ∆Y ik Reduction Shr of high-earnings occupations ∆Y ik Increase Shr of paid employees ∆Y ik Increase Shr of self-employment ∆Y ik Reduction Shr of unpaid workers ∆Y ik Reduction Shr of low-earnings sectors ∆Y ik Reduction Shr of high-earnings sectors ∆Y ik Increase Shr of low-educated workers ∆Y ik Reduction Shr of high-educated workers ∆Y ik Increase Shr of workers registered with SS ∆Y ik Increase Real monthly labor earnings ∆%Y ik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Y ik Reduction 4 USD-a-day poverty rate ∆Y ik Reduction Gini hpci ∆%Y ik Reduction Gini labor earnings ∆%Y ik Reduction + Index of improving changes (Z i ) (1/K)∑Y ik Increase
Changing Labor Market Indicators and the Rate of Economic Growth in Latin America during the 2000s
Changing labor market indicators and economic growth • Q: From beginning to end, how GDP per capita and LMI changed? • We studied: o Annualized GDP per capita growth rates and changes in LMI from beginning to end for the region and country-by-country. • We found: o For the region as a whole : real GDP per capita grew, all employment and earnings indicators improved, and poverty and inequality fell. o For individual countries : real GDP per capita grew in all LA countries, most employment and earnings indicators improved in all countries but one, poverty rates fell in all countries but one.
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