ABSTRACT
The social cost of recession, stabilization and reform has been substantial. The improved social outcomes of the 1990s can be seen as the result of social-sector reforms and greater investment in health and education. This chapter provides empirical evidence to support the view that the persistence of poverty, income inequality, and poor employment outcomes in a context of regional growth and stability may be associated with a change in the basic relationship between economic growth and its impact on welfare. It reviews cross-country comparable economic and social information to assess the impact of economic reforms on the social sector of Latin American countries. The chapter shows that the case-study of Mexico to examine the missing link between renewed growth and social investment on the one hand, and poverty, income distribution and employment on the other. It illustrates one particular aspect of the larger discussion in the context of Mexico: the poor employment performance of the fast-growing modern manufacturing sector.
