Gustavo Vázquez

Recent decline in wage inequality and formalization of the labour market in Argentina

Labour market conditions improved during the 2000s in Latin America, a process that included a reduction in the magnitude of informal employment. A decline of wage inequality was another feature of this period. Both dynamics were particularly intense in Argentina. The purpose of this study is to evaluate the role played by the process of formalization of the labour market that occurred in Argentina during that period on the reduction of income inequality, while additionally taking into account other factors that might have also contributed to such dynamics of income inequality. The method employed is a decomposition proposed by Firpo, Fortin and Lemieux, which allows extending the Oaxaca-Blinder approach to decompose some distributive statistics of income between a ‘composition effect’ and a ‘returns effect’. The study concludes that the process of increasing labour market formalization had an equalizing effect over the period, a finding that had not been emphasized in previous studies.

Una evaluación del efecto scarring en Argentina

En este estudio se evalua el efecto de corto plazo del transito por el desempleo sobre los salarios y la insercion laboral posterior. El llamado efecto scarring no ha sido estudiado previamente en America Latina y en especifico en Argentina. Utilizando el esquema rotativo de la muestra de la Encuesta de Hogares se estima la magnitud de la penalidad salarial, y del incremento en la probabilidad de transitar hacia la informalidad, luego del paso por el desempleo. Se utilizan dos estrategias de estimacion: por un lado, el modelo lineal para datos de panel con efectos fijos y aleatorios; por otro, el estimador de diferencias en diferencias con propensity score matching. Se muestra que el paso por el desempleo eleva en el corto plazo la probabilidad de alcanzar un puesto informal, pero que no es significativa su influencia sobre las remuneraciones, una vez que se controla por el tipo de ocupaciones.

Factors Associated with Poverty and Indigence Mobility in Five Latin American Countries

Abstract Latin America experienced a long period of sustained growth since 2003 that positively impacted social and labor market indicators, including poverty. This paper contributes to the understanding of this process as it carries out a comparative study of poverty and indigence dynamics in five Latin American countries during 2003–2012. Specifically, it extends the analysis of a previously published study by broadening the time coverage and examining indigence mobility. It analyzes the extent to which countries with different levels of poverty (extreme poverty) incidence diverge in terms of exit and entry rates, and identifies the relative importance of the frequency and impact of events associated with poverty transitions. For this, a dynamic analysis of panel data is carried out using regular household surveys. Sizeable rates of poverty and indigence movements were observed in all five countries and it was found that a large proportion of poor or indigent households experienced positive events, mainly related to the labor market; however, only a small fraction of them actually exited poverty and indigence. It appeared, therefore, that even when the economy behaved reasonably well, high levels of labor turnover and income mobility (even of a negative nature) still prevail, mainly associated with the high level of precariousness and the undeveloped system of social protection that characterize the studied countries.