The Growth-Employment-Poverty Nexus in Latin America in the 2000s - - PowerPoint PPT Presentation

The Growth-Employment-Poverty Nexus in Latin America in the 2000s

Guillermo Cruces

CEDLAS-FCE-UNLP, CONICET and IZA

Gary S. Fields

Cornell University, IZA and WIDER

David Jaume

Cornell University and CEDLAS-FCE- UNLP

Mariana Viollaz

CEDLAS-FCE-UNLP

Motivation

• Interest in the links between growth, employment,

and poverty.

• Main questions:
• Has economic growth resulted in economic development

via improved labor market conditions in the 2000s?

• Have these improvements halted or been reversed since

the Great Recession of 2008?

• 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?

Policy Action Economic growth and other policy actions Transmission Channel Employment Social programs Outcome Variable Poverty and other outcome variables A B C D A

Analytical Framework (Fields, 2016)

Policy Action Economic growth and other policy actions Transmission Channel Employment Social programs Outcome Variable Poverty and other outcome variables A B C D A

In this research

Our outputs

• 17 WIDER working papers :
• 16 country papers
• 1 cross-country paper
• A book: “Growth, employment and Poverty in Latin

America” published by Oxford University Press in July 2017.

Data sources

• Microeconomic data from SEDLAC (CEDLAS and

World Bank) for 16 countries, from 2000 to 2012/2013:

• More than 150 household surveys, 5 million households

and 18 million people.

• 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 initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

Labor market indicators and Evaluation criteria

Change from Welfare improving initial to final year change Employment and earnings indicators Unemployment rate ∆Yik Reduction Shr of low-earnings occupations ∆Yik Reduction Shr of high-earnings occupations ∆Yik Increase Shr of paid employees ∆Yik Increase Shr of self-employment ∆Yik Reduction Shr of unpaid workers ∆Yik Reduction Shr of low-earnings sectors ∆Yik Reduction Shr of high-earnings sectors ∆Yik Increase Shr of low-educated workers ∆Yik Reduction Shr of high-educated workers ∆Yik Increase Shr of workers registered with SS ∆Yik Increase Real monthly labor earnings ∆%Yik Increase Poverty and inequality indicators 2.5 USD-a-day poverty rate ∆Yik Reduction 4 USD-a-day poverty rate ∆Yik Reduction Gini hpci ∆%Yik Reduction Gini labor earnings ∆%Yik Reduction Index of improving changes (Zi) (1/K)∑Yik

+

Increase Labor market indicators (Yik)

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?

Unemployment and GDP in Latin America during the 2000s

117 77 88 119

20 25 30 35 40 45

70 80 90 100 110 120 130

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GDPpc GDPpc GDPpc Unemployment

Labor earning and GDP in Latin America during the 2000s

101 109 88 119

20 25 30 35 40 45

70 80 90 100 110 120 130

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GDPpc GDPpc GDPpc Mean Labor earnings

Poverty and GDP in Latin America during the 2000s

88 119 40 25

20 25 30 35 40 45

70 80 90 100 110 120 130

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GDPpc GDPpc GDPpc Poverty 4 dollars-a-day

Country-by-Country: Economic growth

0.8 1.4 1.7 2.1 2.2 2.4 2.4 2.9 3.0 3.0 3.1 3.2 3.6 3.6 5.6 5.6

0.0 1.0 2.0 3.0 4.0 5.0 6.0 MX (2000-2012) SV (2000-2012) VE (2000-2012) HN (2001-2012) BO (2000-2012) PY (2001-2013) BR (2001-2012) CR (2001-2009) CL (2000-2011) EC (2003-2012) UY (2000-2012) CO (2002-2013) AR (2000-2012) DO (2000-2012) PE (2003-2012) PA (2001-2012)

Annualized growth rate of GDP per capita (USD 05 PPP)

Country-by-Country: Economic growth

0.8 1.4 1.7 2.1 2.2 2.4 2.4 2.9 3.0 3.0 3.1 3.2 3.6 3.6 5.6 5.6

0.0 1.0 2.0 3.0 4.0 5.0 6.0 MX (2000-2012) SV (2000-2012) VE (2000-2012) HN (2001-2012) BO (2000-2012) PY (2001-2013) BR (2001-2012) CR (2001-2009) CL (2000-2011) EC (2003-2012) UY (2000-2012) CO (2002-2013) AR (2000-2012) DO (2000-2012) PE (2003-2012) PA (2001-2012)

Annualized growth rate of GDP per capita (USD 05 PPP)

Country-by-Country: Economic growth

0.8 1.4 1.7 2.1 2.2 2.4 2.4 2.9 3.0 3.0 3.1 3.2 3.6 3.6 5.6 5.6

0.0 1.0 2.0 3.0 4.0 5.0 6.0 MX (2000-2012) SV (2000-2012) VE (2000-2012) HN (2001-2012) BO (2000-2012) PY (2001-2013) BR (2001-2012) CR (2001-2009) CL (2000-2011) EC (2003-2012) UY (2000-2012) CO (2002-2013) AR (2000-2012) DO (2000-2012) PE (2003-2012) PA (2001-2012)

Annualized growth rate of GDP per capita (USD 05 PPP)

Country-by-Country: Economic growth

0.8 1.4 1.7 2.1 2.2 2.4 2.4 2.9 3.0 3.0 3.1 3.2 3.6 3.6 5.6 5.6

0.0 1.0 2.0 3.0 4.0 5.0 6.0 MX (2000-2012) SV (2000-2012) VE (2000-2012) HN (2001-2012) BO (2000-2012) PY (2001-2013) BR (2001-2012) CR (2001-2009) CL (2000-2011) EC (2003-2012) UY (2000-2012) CO (2002-2013) AR (2000-2012) DO (2000-2012) PE (2003-2012) PA (2001-2012)

Annualized growth rate of GDP per capita (USD 05 PPP) LA region: 2.9% OECD: 1.0% USA: 0.9%

Country-by-Country: Changes in LMI

87.5 87.5 62.5 93.8 100 93.8 75.0 18.8 81.3 62.5 81.3 75.0 81.3 100 100 92.9

10 20 30 40 50 60 70 80 90 100

VE UY SV PY PE PA MX HN EC DO CR CO CL BR BO AR

Percentage of improving indicators (Zi)

Country-by-Country: Changes in LMI

87.5 87.5 62.5 93.8 100 93.8 75.0 18.8 81.3 62.5 81.3 75.0 81.3 100 100 92.9

10 20 30 40 50 60 70 80 90 100

VE UY SV PY PE PA MX HN EC DO CR CO CL BR BO AR

Percentage of improving indicators (Zi)

All but one improved at least 63% of LMI

Country-by-Country: Changes in LMI

87.5 87.5 62.5 93.8 100 93.8 75.0 18.8 81.3 62.5 81.3 75.0 81.3 100 100 92.9

10 20 30 40 50 60 70 80 90 100

VE UY SV PY PE PA MX HN EC DO CR CO CL BR BO AR

Percentage of improving indicators (Zi)

All but three improved at least 75% of LMI

Summary of findings

• Real GDP per capita grew for the average of the

region, all employment and earnings indicators improved, and poverty and inequality fell.

• 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

• ne.

Cross-country analysis of the growth-employment- poverty nexus

• Q: Did countries with a higher rate of

economic growth experience larger improvements in LMI?

Growth-employment nexus

Growth-employment nexus

Percentage of improving LMI and annualized growth rate of GDP per capita

AR BO BR CL CO CR DO EC HN MX PA PE PY SV UY VE

20 40 60 80 100 % of improving LMI 1 2 3 4 5 6 % GDPpc at PPP 2005 With HN Without HN

Regression details: With HN: Y=65.4+5.26(3.95)X, R2= .112 Without HN: Y=75.3+3.24(2.43)X, R2= .12

R2 = 0.11

Growth-labor earnings

Annualized changes in mean labor earnings and annualized growth rate of GDP per capita.

AR BO BR CL CO CR DO EC SV HN MX PA PY PE UY VE

• 4
• 2

2 4 % Mean labor earnings 1 2 3 4 5 6 Annual growth in GDP per capita

Regression details: Y=.05+.23(.336)X. R2=.032

R2 = 0.03

Growth-poverty nexus

Annual change in the Poverty 4-USD-a-day and annualized growth rate of GDP per capita

AR BO BR CL CO CR DO EC SV HN MX PA PY PE UY VE

• 3
• 2
• 1

1  Poverty rate 4 USD-a-day 1 2 3 4 5 6 Annual growth in GDP per capita

Regression details: Y=-.68-.25(.194)X. R2=.105

R2 = 0.056

Growth-job mix

Annual change in the share of registered workers and annualized growth rate of GDP per capita

AR BO BR CL CO CR DO EC SV HN MX PA PY PE UY VE

• 1

1 2 3 4  Shr of registered workers 2 4 6 8 Annual growth in GDP per capita

Regression details: Y=-.54+.44(.132)X. R2=.439

R2 = 0.44

• Across countries:
• Faster growth is associated with larger improvements in

LMI.

• In general, the relationships are not tight (low R2).
• The weak relationship seems to be driven by the

experiences of the countries which grew at moderate rates by Latin American standards.

Summary of findings: Growth- employment and growth-poverty nexus

• Q: Were improvements in LMI related to other factors beyond

economic growth?

• Across countries, relationship between improvements in LMI and:
• Initial GDP
• Initial level of LMI
• Annualized change in macroeconomic variables other than GDP
• We concluded:
• Initial GDP was unrelated to changes in LMI.
• Convergence pattern in 5 /16 LMI: unemployment, share of unpaid family

workers, both poverty measures, inequality of HIPC.

• Increases in some macroeconomic variables are associated with changes in

labor market conditions during the 2000s.

• No unique configuration of macroeconomic variables that was associated with

the several successful experiences among our sample of 16 countries.

Beyond Economic Growth

Cross-Country relationship between the percentage of improving LMI and the annualized changes in services and exports

AR BO BR CL CO CR DO EC HN MX PA PE PY SV UY VE

20 40 60 80 100

• .6
• .4
• .2

.2 .4

% Services

Regression details: With HN: Y=79.7-18.0(13.2)X, R2= .116 Without HN: Y=84.1-9.64(8.38)X, R2= .092 AR BO BR CL CO CR DO EC HN MX PA PE PY SV UY VE

20 40 60 80 100

• 1

1 2

% Exports

Regression details: With HN: Y=74.0+15.2(6.32)X, R2= .293 Without HN: Y=80.2+9.54(3.97)X, R2= .307

% of improving LMI

With HN Without HN

Cross-country employment-poverty nexus

• Q: Are larger improvements in

employment and earnings indicators associated with larger reductions in poverty?

Cross-country correlations between the annualized reductions in the poverty rate 4 USD-a-day and LMI during the 2000s

0.17 0.28 0.41 0.47 0.51 0.58 0.59 0.61 0.61 0.62 0.63 0.73 0.75 0.88 0.0 0.2 0.4 0.6 0.8 1.0 Increase in workers registered with SS Decrease in self-employment Decrease in unemployment Increase in high-earnings occupations Decrease in low educated workers Decrease in workers in low-earnings sectors Increase in wage/salaried employees Decrease in unpaid family workers Increase in high-earnings sectors Decrease in GINI HPCI Increase in highly educated workers Decrease in low-earnings occupations Decrease in GINI of labor earnings Increase in mean labor earnings

Correlations of Δpoverty 4 USD-a-day and ΔLMI

Cross-country correlations between the annualized changes in the poverty rate 4 USD-a-day and LMI during the 2000s

0.17 0.28 0.41 0.47 0.51 0.58 0.59 0.61 0.61 0.62 0.63 0.73 0.75 0.88 0.0 0.2 0.4 0.6 0.8 1.0 Increase in workers registered with SS Decrease in self-employment Decrease in unemployment Increase in high-earnings occupations Decrease in low educated workers Decrease in workers in low-earnings sectors Increase in wage/salaried employees Decrease in unpaid family workers Increase in high-earnings sectors Decrease in GINI HPCI Increase in highly educated workers Decrease in low-earnings occupations Decrease in GINI of labor earnings Increase in mean labor earnings

Correlations of Δpoverty 4 USD-a-day and ΔLMI

Cross-country correlations between the annualized changes in the poverty rate 4 USD-a-day and LMI during the 2000s

0.17 0.28 0.41 0.47 0.51 0.58 0.59 0.61 0.61 0.62 0.63 0.73 0.75 0.88 0.0 0.2 0.4 0.6 0.8 1.0 Increase in workers registered with SS Decrease in self-employment Decrease in unemployment Increase in high-earnings occupations Decrease in low educated workers Decrease in workers in low-earnings sectors Increase in wage/salaried employees Decrease in unpaid family workers Increase in high-earnings sectors Decrease in GINI HPCI Increase in highly educated workers Decrease in low-earnings occupations Decrease in GINI of labor earnings Increase in mean labor earnings

Correlations of Δpoverty 4 USD-a-day and ΔLMI

Cross-country correlations between the annualized changes in the poverty rate 4 USD-a-day and LMI during the 2000s

0.17 0.28 0.41 0.47 0.51 0.58 0.59 0.61 0.61 0.62 0.63 0.73 0.75 0.88 0.0 0.2 0.4 0.6 0.8 1.0 Increase in workers registered with SS Decrease in self-employment Decrease in unemployment Increase in high-earnings occupations Decrease in low educated workers Decrease in workers in low-earnings sectors Increase in wage/salaried employees Decrease in unpaid family workers Increase in high-earnings sectors Decrease in GINI HPCI Increase in highly educated workers Decrease in low-earnings occupations Decrease in GINI of labor earnings Increase in mean labor earnings

Correlations of Δpoverty 4 USD-a-day and ΔLMI

Cross-country correlations between the annualized changes in the poverty rate 4 USD-a-day and LMI during the 2000s

0.17 0.28 0.41 0.47 0.51 0.58 0.59 0.61 0.61 0.62 0.63 0.73 0.75 0.88 0.0 0.2 0.4 0.6 0.8 1.0 Increase in workers registered with SS Decrease in self-employment Decrease in unemployment Increase in high-earnings occupations Decrease in low educated workers Decrease in workers in low-earnings sectors Increase in wage/salaried employees Decrease in unpaid family workers Increase in high-earnings sectors Decrease in GINI HPCI Increase in highly educated workers Decrease in low-earnings occupations Decrease in GINI of labor earnings Increase in mean labor earnings

Correlations of Δpoverty 4 USD-a-day and ΔLMI

Annualized changes in mean labor earnings and annualized changes in the poverty rate 4 USD-a-day.

AR BO BR CL CO CR DO EC SV HN MX PA PY PE UY VE

• 3
• 2
• 1

1  Poverty rate 4 USD-a-day

• 4
• 2

2 4 % Mean labor earnings

Regression details: Y=-1.0-.53(.075)X. R2=.779

Labor earnings and poverty

R2 = 0.78

Annualized changes in share of wage/salaried employee and annualized changes in the poverty rate 4 USD-a-day.

AR BO BR CL CO CR DO EC SV HN MX PA PY PE UY VE

• 3
• 2
• 1

1  Poverty rate 4 USD-a-day

• .5

.5 1  Shr of wage/sal. employees

Regression details: Y=-1.0-1.55(.568)X. R2=.348

Wage/salaried employment and poverty

R2 = 0.348

Summary of employment-poverty findings

• Across-countries:
• Large association between improvements in

earnings and employment indicators and reductions in poverty.

Changes of Labor Earnings across the Earnings Distribution within Country: Growth Incidence Curves

Growth incidence curves for labor earnings

• Earnings: main source of income for LA households.

Increase at the bottom of the distribution and reductions in inequality.

• Mean labor earnings increased in 11 countries,

decreased in 5.

• For 9 countries, positive changes along all the

distribution (and 2 more: all but top decile).

• 70% of deciles experienced increases in labor earnings.
• 30% of deciles with no growth (5 countries where mean

earnings fell)

Progressive changes, but high heterogeneity

Selected relative growth incidence curves

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Bolivia 2000-2012

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Brazil 2001-2012

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Chile 2000-2011

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Colombia 2002-2013

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Costa Rica 2000-2009

• 40

40 80 120 1 2 3 4 5 6 7 8 9 10

Dominican Republic 2000-2012

The 2008 Economic Crisis and Changes in Labor Market Indicators

The Great Recession, labor market indicators, poverty and growth

• Average GDPpc was stagnant in 2000-2003 but then increased every

year after that, except for 2008.

• Crisis milder in LA than in OECD (-1.5% vs -4%).
• Unemployment increased in 2000-2002, then fell every year except

for 2008.

• Poverty increased in only 5 and fell in 8 out of the 16 countries during

the crisis. Extreme pov. in only 1.

• Average poverty rate did not increase during the crisis.

Countercyclical policies, social protection programs.

• Quicker recovery too: growth again in all LA countries.
• Initial worsening, but relatively quick recovery of LMI. Some

surpassed pre-crisis level at the end of the period.

The Great Recession and Latin America. Newfound resilience?

The Great Recession and Latin America.

% of LMI not affected/recovered

0% 20% 40% 60% 80% 100% VE UY SV PY PE PA MX HN EC DO CO CL BR BO AR Not affected Total recoveries Partial recoveries Continued worsening

• 2.5
• 2.0
• 1.5
• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Poverty GDP Inequality High growth Crisis and Deceleration Stagnation The 1990s

Source: Gasparini, Galiani, Cruces and Acosta 2015, based on SEDLAC (CEDLAS and World Bank) and WDI

What happened next?

Final Remarks

Summary of findings

• Original questions:
• Has economic growth resulted in economic development via

improved labor market conditions in LA in the 2000s?

• Have these improvements halted or been reversed since the

Great Recession of 2008?

• Relationship growth/LMI/poverty/inequality?
• For the region as a whole: real GDP pc grew during the

2000s, all employment and earnings indicators improved, and poverty and inequality fell.

• By-country: 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.

Summary of findings

• Across countries:
• Faster growth weakly associated with larger LMI

improvements

• Some macro factors associated with changes in LMI.
• Larger improvements in employment and earnings were

associated with larger reductions in poverty.

• Within countries:
• Faster growth related to more rapid LMI improvements and

subsequently faster poverty reduction.

• Heterogeneity in magnitudes and patterns.
• Strongly progressive patterns of changes in labor market

earnings.

Augmenting Bourguignon’s Triangle

• Bourguignon 2003 (on Poverty-Growth-

Inequality) :

• Do these results imply that growth has no significant

impact on distribution? Certainly not. They simply mean that there is too much country specificity in the way growth may affect distribution for any generalization to be possible.

• Indeed, case studies… show that distributional

changes in a given country have much to do with the pace and structural features of economic growth in the period under analysis….

• …Mediated through labor markets.

Additional Material

• A video of a more extensive version of this

presentation at the UNU-WIDER 30th anniversary conference : https://www.wider.unu.edu/video/latin- america-employment-and-poverty

• The series of 17 papers :

https://www.wider.unu.edu/project/growth- employment-poverty-nexus-latin-america- 2000s?pages=2

• The book (open access):

https://www.wider.unu.edu/publication/growth- employment-and-poverty-latin-america