The urgent need for labor law reform

Journal of Democracy

Volumn 17, Issue 4, 2006, Pages 50-64

  Sabatini, Christopher ^a   Farnsworth, Eric ^b  

^a Americas Society

^b Council of the Americas ^*

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33750978140     PISSN: 10455736     EISSN: None     Source Type: Journal    
DOI: 10.1353/jod.2006.0071     Document Type: Article

References (25)

1. While disagreements among experts about the precise meaning of economic "informality" make defining (not to say measuring) the phenomenon a tricky business, we use the term "informal" here to refer to firms and the self-employed that conduct their hiring operations (and perhaps all their operations generally) outside labor codes and other formal legal requirements.
2. At its most basic, the term "populist" generally denotes a movement that mobilizes those who feel themselves to be disadvantaged by socioeconomic and political dislocation, as well as a leadership style that draws on a sense of disaffection from the established political system and elites. For the evolving debate on the nature and definition of modern-day populism in Latin America see Kenneth Roberts, "Populism, Political Conflict, and Grass-Roots Organization in Latin America: A Comparison of Fujimori and Chávez," Comparative Politics 38 (January 2006): 1-39;
3. Steve Ellner, "The Contrasting Variants of Populism of Hugo Chàvez and Alberto Fujimori," Journal of Latin America Studies 35 (February 2003): 139-62;
4. and Kurt Weyland, "Neopopulism and Neoliberalism in Latin America: Unexpected Affinities," Studies in Comparative International Development 31 (Fall 1996): 3-31.
5. World Bank Development Indicators database, Latin America and the Caribbean, Unemployment, total (percent of total labor force), 1989-2003. See http://devdata.worldbank.org/data-query.
6. In Colombia, Ecuador, Panama, Peru, and Venezuela, veteran workers receive a seniority premium not only if they are laid off, but even if they quit.
7. Victor Tokman, "Integrating the Informal Sector in the Modernization Process," SAIS Review 21 (Winter-Spring 2001): 45-60.
8. James Heckman and Carmen Pages, "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," NBER Working Paper No. W7773, June 2000.
9. Heckman and Pages, "The Cost of Job Security Regulation," 29.
10. See for example, William Maloney, "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review 13 (May 1999): 275-302;
11. and Jaime Saavedra, "Labor Markets During the 1990s," in Pedro-Pablo Kuczynski and John Williamson, eds., After the Washington Consensus: Restarting Growth and Reform in Latin America (Washington, D.C.: Institute for International Economics, 2003), 213-64.
12. The growth rate in the informal sector was 3.9 percent while in the formal sector it was 2.1 percent. See International Labor Organisation, Global Employment Trends Brief, February 2005, 6.
13. Most research on the informal sector in Latin America places the total size of the sector regionwide at around or just over 50 percent of the urban workforce. The International Labor Organisation's 2002 Labor Overview calculated the rate at 46.3 percent. Nicolai Kristensen and Wendy Cunningham estimate the range throughout the region as 30 to 70 percent, and Tokman, citing International Labor Organisation numbers, says that the sector provides about 57 percent of total urban employment in Latin America. Nicolai Kristensen and Wendy Cunningham, "Do Minimum Wages in Latin America and the Caribbean Matter? Evidence from 19 Countries," World Bank Policy Research Working Paper 3870, March 2006;
14. and Tokman, "Integrating the Informal Sector in the Modernization Process."
15. International Labor Organisation, Global Employment Trends Brief, February 2005, 6.
16. Economic Commission for Latin America, Boletin demográfico: America Latino y Caribe - Estmaciones y proyecciones de población, 1950 (Santiago, Chile: United Nations, 2002), 38,
17. Table lia, "America Latina: Estimaciones y Proyecciones de la Población Total."
18. International Labor Organisation, Global Employment Trends Brief, February 2005, 7.
19. Jaime Saavedra, "Labor Markets During the 1990s," 246.
20. Ruth Berins Collier and Samuel Handlin, "Shifting Interest Regimes of the Working Classes in Latin America," Institute of Industrial Relations Working Paper Series (Berkeley: University of California, 2005), 7.
21. Anonymous interview conducted by Christopher Sabatini, Caracas, Venezuela, 25 June 2002.
22. Steve Ellner, "Organized Labor and the Challenge of Chavismo" in Steve Ellner and Daniel Hellinger, eds., Venezuelan Politics in the Chdvez Era: Class, Polarization and Conflict (Boulder, Colo.: Lynne Rienner, 2003).
23. Ruth Berins Collier and Samuel Handlin, "Shifting Interest Regimes of the Working Classes in Latin America," 14.
24. Studies done for the Research Network of the Inter-American Development Bank have found a negative relationship between high barriers to firing and employment demand in Argentina, Colombia, and Peru as well as Barbados. See Research Network Working Papers R-388, R-391, R-393. and R-394 at www.iadb.org/RES/pub_List.cfm?pub_type_id=RNP
25. . The most rigorous cross-country analysis of the effects of firing costs on employment concludes that a reduction in the costs associated with shedding workers reduces worker tenure but is also associated with a decline in the duration of unemployment. See Heckman and Pages, "The Cost of Job Security Regulation."