151. Labour market flexibility, employment and inequality: lessons from Chile
- Author
-
Paul W. Posner
- Subjects
Labour economics ,Economic expansion ,Inequality ,050204 development studies ,Labour law ,media_common.quotation_subject ,05 social sciences ,Geography, Planning and Development ,Flexibility (personality) ,Labour market flexibility ,Development ,0506 political science ,Bargaining power ,Economic inequality ,0502 economics and business ,Political Science and International Relations ,Unemployment ,050602 political science & public administration ,Economics ,media_common - Abstract
Flexibility proponents assert that rigid Latin American labour markets impede economic expansion and job growth; they advocate reforming labour codes through increased flexibility. Critics argue that heightened labour flexibility exacerbates inequality without expanding employment. From this perspective, precarious employment and inequality are remedied by strengthening labour’s bargaining power. Chile’s maintenance of flexible labour reforms adopted during the dictatorship make it appropriate for evaluating these competing perspectives. Based on flexibility proponents’ predictions, we should expect increased formal sector employment over time, particularly among the least skilled Chilean workers, as well as reduced wage inequality. Yet, the rate of unemployment among least skilled workers in Chile remains essentially unchanged since the democratic transition as does income inequality. These conditions persist despite a high degree of labour market flexibility. Thus, Chile’s continued adherence to...
- Published
- 2016
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