Publication: Informal Employment in Argentina : Causes and Consequences
Loading...
Date
2008-03
ISSN
Published
2008-03
Author(s)
Editor(s)
Abstract
This report presents the final results and conclusions of a two-year program developed by a World Bank team in Argentina, to analyze the determinants of informality and its impact on poverty and equity. Informality in the labor market has become a central concern for policy makers and the society at large in Argentina. The long upward trend in informal employment until recent year has been viewed as a deterioration in working conditions that is behind the sustained rise in poverty and inequality in the last quarter of the twentieth century. While some of the possible causes for the rise in informality have been studied, their relative importance remains unclear and its links with poverty and inequality have not been examined in detail. A primary objective of the program is to deepen the shared work with the Argentine government and civil society on socio-economic development and equity issues. The aim has been to analyze and propose policy options for the labor market that respond to the Government's priorities, are technically sound, and provide an open menu for discussion. The study of informality in the labor market is not an empty field in Argentina. Many local analysts have studied its causes and consequences, and this report built on this work. A key aspect of the program was to draw on the extensive local analytical studies on the issues and sustain an active interaction with government counterparts and civil society through technical workshops, meetings and other outreach efforts. This report focused on discussing the evolution, determinants, and policy options to reduce labor informality in Argentina and its impacts. By developing a common base of diagnoses with the government, the program set a path for further discussions and collaborations. Following this process, the Ministry of Labor has already asked the Bank to collaborate on a new program that will focus on labor markets, social protection, and income distribution, looking for policies that would result in better and more effective policies to increase equity in Argentina.
Link to Data Set
Citation
“World Bank. 2008. Informal Employment in Argentina : Causes and Consequences. © World Bank. http://hdl.handle.net/10986/8119 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Determinants of Rising Informality in Brazil : Evidence from Gross Worker Flows(World Bank, Washington, DC, 2007-10)This paper studies gross worker flows to explain the rising informality in Brazilian metropolitan labor markets from 1983 to 2002. This period covers two economic cycles, several stabilization plans, a far-reaching trade liberalization, and changes in labor legislation through the Constitutional reform of 1988. First, focusing on cyclical patterns, the authors confirm that for Brazil, the patterns of worker transitions between formality and informality correspond primarily to the job-to-job dynamics observed in the United States, and not to the traditional idea of the informal queuing for jobs in a segmented market. However, the analysis also confirms distinct cyclical patterns of job finding and separation rates that lead to the informal sector absorbing more labor during downturns. Second, focusing on secular movements in gross flows and the volatility of flows, the paper finds the rise in informality to be driven primarily by a reduction in job finding rates in the formal sector. A small fraction of this is driven by trade liberalization, and the remainder seems driven by rising labor costs and reduced flexibility arising from Constitutional reform.Publication Economic Informality : Causes, Costs, and Policies - A Literature Survey(World Bank, 2009-05-01)In this survey the author assemble recent theoretical and empirical advances in the literature on economic informality, analyzing the causes and costs of informality in developed and developing economies. In accordance with recent evidence, the author discusses the nature and the roots of informal economic activity across countries distinguishing between informality as the result of 'exclusion' and 'exit.' The author then provides an extensive review of recent international experience with policies aimed at reducing informality, in particular policies that facilitate the formalization process, create a framework for the transition from informality to formality, lend support to newly created firms, reduce or eliminate inconsistencies across regulation and government agencies, increase information flows, and increase enforcement.Publication Labor Market Policy in Developing Countries : A Selective Review of the Literature and Needs for the Future(World Bank, Washington, DC, 2007-09)This paper presents a selective overview of the literature on modeling labor market policies in developing countries. It considers welfare economics, theoretical models, and empirical evidence to highlight the three general features needed in future research on labor market policy in developing countries. The author identifies desirable research components (welfare economics, theoretical modeling, and empirical modeling) and pitfalls in the literature (inappropriate use of productivity, reliance on wrong kinds of empirical studies, lack of cost-benefit analysis, attention to only a subset of the goods and bads, and fallacy of composition). The paper concludes with suggested topics and methods for future research. The author states that sound labor market policy requires sound labor market models. The paper makes a case for developing policy based on explicit evaluation criteria, specific theoretical models, and comprehensive empirical evidence.Publication Reforming Severance Pay : An International Perspective(World Bank, 2012)Throughout the developed and developing world there is growing demand for policies that would facilitate access to jobs by the most vulnerable, improve their earnings, and reduce their dependency on public support. As a result, governments are increasingly focused on removing obstacles faced by employers to create jobs and on instilling incentives for individuals to re-enter the labor market or to move toward more productive employment possibilities. Severance pay a program compensating formal workers for dismissal by employers or with an end-of-service benefit is often blamed for distorting employer hiring and firing decisions. Together with restrictive labor market regulations and other formal labor market features, this program is held responsible for excessive job protection with a negative impact on labor market outcomes, in particular affecting the most vulnerable. Despite this strong negative assessment among many labor market economists, surprisingly little is known about this program that exists in most countries around the world as a legally mandated benefit. This lack of knowledge may derive from the special 'positioning' of the program between labor code and social insurance; its origins were in the first policy domain, but its objectives for key programs were replicated in the second domain in particular unemployment and retirement benefits. This is the first-ever book to shed light on this program in a comprehensive manner its historical origins, its rationale, and its characteristics across the world. It reviews the soundness of the empirical accusation, assesses recent country reforms, and offers policy reform alternatives and policy guidance. The policy directions include folding severance pay into existing social insurance programs, where they exist, and to make severance pay contractual between market partners as a way to enhance efficiency in a knowledge-based economy. Folding severance pay into employment benefits may also be an opportunity to move away from unemployment insurance, which is fraught by moral hazard, toward a promising 'hybrid' system of unemployment insurance savings accounts supplemented by social pooling.Publication Kosovo - Youth in Jeopardy : Being Young, Unemployed, and Poor in Kosovo(Washington, DC, 2008-09)The main objective of the report is to provide diagnosis on youth employment, which can provide the basis for future policy design. The report is structured as follows: the chapter one provides a general background of macroeconomic and employment outcomes in Kosovo. The chapter then explains the framework, scope, and limitations of this study (Why youth? Why youth in jeopardy?). Chapter two develops a youth employment profile using data from the 2003-2006 labor force surveys and the 2006 household budget survey; analysis includes a profile of youth in jeopardy in Kosovo, employment trends, and assessment of youth employment quality and constraints. Chapter three provides an overview of the current youth programs and policies being implemented in the territory in the context of the Kosovo Youth National Action Plan (KYNAP).
Users also downloaded
Showing related downloaded files
Publication Poverty and Shared Prosperity 2016(Washington, DC: World Bank, 2016-10-02)Poverty and Shared Prosperity 2016 is the first of an annual flagship report that will inform a global audience comprising development practitioners, policy makers, researchers, advocates, and citizens in general with the latest and most accurate estimates on trends in global poverty and shared prosperity. This edition will also document trends in inequality and identify recent country experiences that have been successful in reducing inequalities, provide key lessons from those experiences, and synthesize the rigorous evidence on public policies that can shift inequality in a way that bolsters poverty reduction and shared prosperity in a sustainable manner. Specifically, the report will address the following questions: • What is the latest evidence on the levels and evolution of extreme poverty and shared prosperity? • Which countries and regions have been more successful in terms of progress toward the twin goals and which are lagging behind? • What does the global context of lower economic growth mean for achieving the twin goals? • How can inequality reduction contribute to achieving the twin goals? • What does the evidence show concerning global and between- and within-country inequality trends? • Which interventions and countries have used the most innovative approaches to achieving the twin goals through reductions in inequality? The report will make four main contributions. First, it will present the most recent numbers on poverty, shared prosperity, and inequality. Second, it will stress the importance of inequality reduction in ending poverty and boosting shared prosperity by 2030 in a context of weaker growth. Third, it will highlight the diversity of within-country inequality reduction experiences and will synthesize experiences of successful countries and policies, addressing the roots of inequality without compromising economic growth. In doing so, the report will shatter some myths and sharpen our knowledge of what works in reducing inequalities. Finally, it will also advocate for the need to expand and improve data collection—for example, data availability, comparability, and quality—and rigorous evidence on inequality impacts in order to deliver high-quality poverty and shared prosperity monitoring.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.Publication Poverty and Shared Prosperity 2018(Washington, DC: World Bank, 2018-10-17)The World Bank Group has two overarching goals: End extreme poverty by 2030 and promote shared prosperity by boosting the incomes of the bottom 40 percent of the population in each economy. As this year’s Poverty and Shared Prosperity report documents, the world continues to make progress toward these goals. In 2015, approximately one-tenth of the world’s population lived in extreme poverty, and the incomes of the bottom 40 percent rose in 77 percent of economies studied. But success cannot be taken for granted. Poverty remains high in Sub- Saharan Africa, as well as in fragile and conflict-affected states. At the same time, most of the world’s poor now live in middle-income countries, which tend to have higher national poverty lines. This year’s report tracks poverty comparisons at two higher poverty thresholds—$3.20 and $5.50 per day—which are typical of standards in lower- and upper-middle-income countries. In addition, the report introduces a societal poverty line based on each economy’s median income or consumption. Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle also recognizes that poverty is not only about income and consumption—and it introduces a multidimensional poverty measure that adds other factors, such as access to education, electricity, drinking water, and sanitation. It also explores how inequality within households could affect the global profile of the poor. All these additional pieces enrich our understanding of the poverty puzzle, bringing us closer to solving it. For more information, please visit worldbank.org/PSPPublication Poverty and Shared Prosperity 2022(Washington, DC : World Bank, 2022)Poverty and Shared Prosperity 2022: Correcting Course provides the first comprehensive analysis of the pandemic’s toll on poverty in developing countries. It identifies how governments can optimize fiscal policy to help correct course. Fiscal policies offset the impact of COVID-19 on poverty in many high-income countries, but those policies offset barely one quarter of the pandemic’s impact in low-income countries and lower-middle-income countries. Improving support to households as crises continue will require reorienting protective spending away from generally regressive and inefficient subsidies and toward a direct transfer support system—a first key priority. Reorienting fiscal spending toward supporting growth is a second key priority identified by the report. Some of the highest-value public spending often pays out decades later. Amid crises, it is difficult to protect such investments, but it is essential to do so. Finally, it is not enough just to spend wisely - when additional revenue does need to be mobilized, it must be done in a way that minimizes reductions in poor people’s incomes. The report highlights how exploring underused forms of progressive taxation and increasing the efficiency of tax collection can help in this regard. Poverty and Shared Prosperity is a biennial series that reports on global trends in poverty and shared prosperity. Each report also explores a central challenge to poverty reduction and boosting shared prosperity, assessing what works well and what does not in different settings. By bringing together the latest evidence, this corporate flagship report provides a foundation for informed advocacy around ending extreme poverty and improving the lives of the poorest in every country in the world. For more information, please visit worldbank.org/poverty-and-shared-prosperity.Publication Reversing the Inequality Pandemic(World Bank, Washington, DC, 2020-10-05)World Bank Group President David Malpass spoke about the Coronavirus (COVID-19) pandemic that has already changed our world decisively and forced upon the world a painful transformation. He explained the World Bank Group’s approach that has been comprehensive by focusing on saving lives, protecting the poor and vulnerable, ensuring sustainable business growth, and rebuilding in better ways. He focused on four urgent aspects of this work: (i) first, the need to redouble efforts to alleviate poverty and inequality; (ii) second, the associated loss of human capital and what must be done to restore it; (iii) third, the urgent need to help the poorest countries make their government debt more transparent and permanently reduce their debt burdens, two necessary steps to attract effective investment; and (iv) finally, how we can cooperate to facilitate the changes needed for an inclusive and resilient recovery.