Abstract
In recent decades Latin America has experienced a steady and substantial increase in the share of workers characterized by informal employment status. From 1990 to 1997, for instance, the share of informal employment for a group of 14 Latin American countries increased from 51.8 to 57.7 per cent, based on a definition of informal employment used by the International Labour Organization which includes non-agricultural employment in small firms, self-employment and domestic service.2 One reason for concern regarding the growing share of informal employment in Latin America is that such employment is often characterized by poor work conditions, including low labour standards.
For their helpful comments, the authors would like to thank Ajit Ghose, Alejandro Portes, Ken Swinnerton and three anonymous referees.
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Notes
A. Portes (1989) ‘Latin American Urbanization in the Years of the Crisis’, Latin American Research Review, 24(3); A. Portes and R. Schauffler (1993) ‘Competing Perspectives on the Latin American Informai Sector’, Population and Development Review, 19(1); A. Portes (1994) ‘When More Can Be Less: Labor Standards, Development, and the Informal Economy’, in C.A. Rakowski (ed.), Contrapunto: The Informal Sector Debate in Latin America (Albany: State University of New York Press).
World Bank (1995) Labor and Economic Reforms in Latin American and the Caribbean (Washington, DC: The World Bank), p. 6.
A. Singh and A. Zammit (2000) The Global Labour Standards Controversy: Critical Issues for Developing Countries (Geneva: South Centre).
D. Rodrik (1997) Democracy and Economic Performance (Cambridge, MA: Harvard University Press).
Singh and Zammit describe the relationship between economic growth and formal employment as follows: ‘Employment in the formal sector increases until a very high level of per capita income is reached. At that point, the share of employment in industry declines and that of services, particularly informal services (informal in the sense that many labour laws become difficult to apply due to the small size of the enterprise), begins to rise’ (Singh and Zammit, op. cit., pp. 31–2). Regarding the relationship between FACB rights and conflict, perhaps also relevant are the findings of several studies providing evidence that greater coordination in collective bargaining is associated with less strike activity (summarized in T. Aidt and Z. Tzannatos (2002) Unions and Collective Bargaining: Economic Effects in a Global Environment (Washington, DC: The World Bank)). Interpreting the findings of these studies, Aidt and Tzannatos write: ‘This suggests that a coordinated bargaining system can produce social peace because it either helps to institutionalize a distributional norm or improves the flow of information and thereby reduces the risk that a strike would occur because of the workers’ misconception about the firm’s profitability’ (Aidt and Tzannatos, op. cit., p. 116).
Freedom House (1999) Freedom in the World: The Annual Survey of Political Rights and Civil Liberties 1998–99 (New York: Freedom House), p. 548.
Data sources: Civil liberties and political rights indices: Freedom House, www.freedomhouse.org Employment protection index: Mârquez and Pagés (1998). Employment shares: ILO (1998). Job security index: Heckman and Pagés-Serra (2000). Manufacturing wage share (wages relative to value added): UNIDO (2001) UNIDO Industrial Statistics Database (Vienna).
Unionization rate: ILO (1997) World Labour Report, 1997–98 (Geneva).
Urban unemployment rate: ILO (2000) Panorama Laboral (Lima).
All other data: World Bank (2001) World Developmentlndicators (Washington, DC).
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Galli, R., Kucera, D. (2008). Labour Standards and Informal Employment in Latin America. In: Berg, J., Kucera, D. (eds) In Defence of Labour Market Institutions. The International Labour Organization. Palgrave Macmillan, London. https://doi.org/10.1057/9780230584204_9
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DOI: https://doi.org/10.1057/9780230584204_9
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