Job creation in Latin America in the 1990s: the foundation for social policy

Abstract

Summary This paper analyzes labor market trends in Latin America and the Caribbean in the 1990s, arguing that employment must be the foundation of a social policy strategy for the region. The paper begins with a discussion of the expectations for labor market performance that were generated by the reform process in the region. It then provides an overview of what actually happened with respect to participation rates, employment generation, unemployment and wages. It also suggests some reasons why reality was less positive than was expected. Next it examines a new hypothesis about the differential performance of labor markets in the northern and southern subregions. Finally, on the basis of evidence to support the hypothesis, it makes policy recommendations for subregion-specific steps to increase job creation as well as policies relevant for the region as a whole.