Latin America

EMPLOYMENT INDICATORS IN LATIN AMERICA

By Sergio Hernandez

Employment Statistics have a great economic and political significance since they are essential to forecast future economic growth. Indeed, employment data is more reliable as long as their coverage is extensive across industries, regions, and population. In the case of Latin America, there is a big gap among the unemployment statistics reported across the region. Overall, the major economies in South America consistently report unemployment rates much higher than the unemployment levels observed in Mexico. However, there is not a common ground to make reliable comparisons of unemployment statistics among these economies, which is generally true across different regions around the world. Coverage, sample population, and other characteristics used in different employment surveys make extremely difficult to compare the same unemployment levels among countries. As an example, while in Colombia children 10 years and older are counted in employment surveys, in Mexico persons who are 14 years old and older can be counted in similar surveys.

Employment Surveys in major Latin American Economies and the United States

Indeed, employment statistics in Latin America offer different implications given their scope in data coverage. In general, Brazil may not be used to compare unemployment rates with countries reporting data with an extensive geographic coverage. Instead, Brazilian unemployment rates may be a more reliable barometer when data is compared with countries covering similar populated metropolitan areas. Although it is not possible to make direct comparisons at national level across different countries in Latin America, there are some patterns that can be analyzed in each of these countries.

" Argentinean unemployment levels have substantially decreased during the last years and current unemployment rates are in one-single digit. Labor markets in Colombia and Chile have also been in recovery since 2001. Higher gross domestic product (GDP) rates are expected in the next years if these trends continue their current pattern.
" Unemployment in the most populated Brazilian metropolitan areas is currently worse than the observed levels at the beginning of this decade. Now, current unemployment figures are near to 10%, which significantly reduces the full potential of goods and services that could be produced by this big economy (the biggest in Latin America)
" Many argue the usefulness of the statistics reported by INEGI in Mexico. Some studies estimate a quarter of the labor force is occupied by the informal sector, which in some way masks the real unemployment rate. Overall, Mexico reports the lowest unemployment rate in Latin America ranging between 2 and 4%.

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