Labor Market and Income Distribution in Latin America in Times of Economic Growth: Advances and Shortcomings

Abstract

The high rhythm of economic growth experienced by Latin America between 2003 and 2008 has had a positive impact on social and labor market indicators. This has become evident through the dynamic creation of employment, the reduction of unemployment and the fall of income inequality and poverty. However, even in this positive context the region continues to exhibit important shortcomings in the labor market. The most evident are high levels of unemployment, precariousness and informality. Along with this, Latin America is still one of the most unequal regions in the world.

This paper aims to provide an in-depth analysis of labor and income inequality dynamics in Latin America in the new millennium. In particular, we seek to identify the factors behind the changes observed in the distribution of family incomes, evaluating the role played by labor incomes vis a vis other non-labor income sources. Also, given the significance of labor incomes in total incomes, the analysis will address a distinctive feature of labor markets in the region: the phenomenon of labor informality, by studying its characteristics and distributive impacts.

Keywords: Informality, Inequality, Latin America, Minimun Wage

JEL Classification: E24, D63, N36