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The cat chases its tail: Lessons from Latin America

The cat chases its tail: Lessons from Latin America. Kirsten Sehnbruch. ILO, 8th February 2013. Chilean Labour Market Problems. Informality and precarious employment conditions in the formal sector

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The cat chases its tail: Lessons from Latin America

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  1. The cat chases its tail: Lessons from Latin America Kirsten Sehnbruch ILO, 8th February 2013

  2. Chilean Labour Market Problems • Informality and precarious employment conditions in the formal sector • High job rotation, sub-contracting, multiple tax IDs, Freelance contracts for salaried workers, etc. • Labour market segmentation with little mobility (esp for older workers) • Even universal social policies cannot compensate for deficient employment conditions • Antiquated legislation that segments labour market further (esp. severance pay) • Weak unions, unconstructive in development process

  3. Problems with current LM doctrines in LA • Economic growth improves variables on the quantity of employment, but not necessarily on the quality of employment: eg. Income up, Types of contract down • The emphasis on flexibility ignores its costs (voc. training, long-term skill dev, fiscal subsidy of LM and long-term cost, • Shift of risk from companies to individual

  4. Types of Contract Data discrepancy: survey data to administrative data Formal sector: 77 indefinite vs 23 atypical contracts

  5. Employment Duration

  6. Subcontracting

  7. Part-time work • Seen as a solution to low female participation rates, esp in lower income deciles • Seen as a solution to poverty • Seen as a solution to childcare/ work-life balance (with no consideration of gender roles) • Fits with the “flexibility” doctrine of the last 40 yrs

  8. Problems with those arguments • Is any job better than no job???? • Lack of sophisticated data • Lack of integration/intermediation between social programmes (eg CCTs and LMs) • Add another method of flexibilisation into the mix and precariousness will probably worsen • Social security dilemma worsens, and do not discuss part-time work in isolation of childcare institutions or gender roles

  9. The Cat Chases its tail:The Social Security Dilemma

  10. Two possible solutions: • Decouple social security benefits from employment conditions and move towards universal systems and/or • Policies that encourge employment stability (in spite of flexibility doctrine)

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