ABSTRACT
In the last few years Latin American economies have undergone a remarkable transformation in their economic policies. Nations that sneered at the market system and pursued protectionist policies have suddenly embraced structural reforms aimed at deregulating business practices and becoming integrated with the rest of the world. Macroeconomic policies have taken a radical turn in the past decade, which has boosted economic growth in the region from 2.7 per cent in the latter half of the 1980s to 3.5 per cent between 1990 and 1997, reduced the inflation rate to below 30 per cent in nearly every country, and opened up new opportunities for private investment in the most diverse economic activities. However, despite macroeconomic stabilization and structural reforms, employment problems have persisted in Latin America. During the 1990s, employment has grown at a slower pace than in the second half of the 1980s, unemployment rates have not declined in a sustained manner, informal sector activity has increased and employment in non-tradable goods has escalated. In many countries, wages have stagnated and the rate of job creation has seen a slowdown. Where earnings have risen, enormous wage gaps have opened up between skilled and unskilled workers. These achievements have disappointed and confounded economists and policy-makers, who predicted that the macroeconomic reforms and gross domestic product (GDP) growth of the 1990s would lower unemployment and help to raise the wages of lowskilled workers.
