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Employment, the key to equality

File Created On:
March, 2016

In Latin America, the dynamics of the labor market has been key in reducing poverty. There has been significant progress in its social protection system, but significant inequality persist for women and young people. The region has experienced a reduction in poverty and inequality since 2003, a process that began to slow down after 2013 due to the economic climate. Some important factors that have contributed to this positive development are economic growth, improvements in the distribution of income, expansion of social spending and employment recovery, formalization and consolidation of income transfer policies.

Humanum Colombia's article reflects upon the intervention made by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) in launching the Global Human Development Report which was held this week.

"The key to equality is employment"
Employment does not give people the opportunity to work, but also gives access to healthcare and pension systems. Self-employed people lack such access, and gender analysis shows that these results are worse for women, and generally there is a bias in favor of workers with higher income, although the effort was made in the last decade to resolve the problem.

Income inequality of households in Latin America is linked to inequalities in the labor market between men and women, which is determined by their educational level and the burden of care activities their families. Likewise, lower wages that women receive deepen inequality. ECLAC Social Panorama 2014 states that the labor market and unpaid work performed within the household is a unit requiring simultaneous changes that promote better reconciliation of work and family, which will promote greater productivity and equality. Another determinant in explaining inequality of household income is linked to the demand for care. Women have traditionally assumed domestic labor in their families - in particular, the care of children, the disabled and the elderly. In rural areas household jobs such as bringing water, firewood or other fuel home used for food preparation is added.

The gap in participation rate in the labor market between men and women is greater when there is less educational attainment. In the graph presented in the article, the gap is 31 percentage points for people who have an incomplete primary education while it is 11 percentage points for those with a post-secondary education. In some countries, as in the case of Colombia, women have more years of education, but their incomes are lower than those of men.

At the macroeconomic level, policies and public spending on strengthening human capital are necessary, while industries that generate formal employment should be promoted. In terms of the regulation of labor markets, policies should be made to promote the formalization of employment and businesses, while the incomes of workers are increased. A set of actions that expand the labor force participation of women and to provide them economic autonomy is essential. More specifically, this will involve the construction of institutionalized alternatives to children, disabled and elderly care, as well as policies that penalize income discrimination against women. Strengthening labor inspection and the mechanisms of protection of labor is also needed.

However, as much as social policy has an important role, the quality of life of people will ultimately depend on employment with guarantees of protection.

Read full article (available in Spanish): http://www.humanumcolombia.org/america-latina-reflexiones-sobre-trabajo-...