Abstract
Abstract: This document analyzes the interactions between macroeconomic regimes, employment generation and the dynamics of labor incomes in Argentina under two different macroeconomic regimes: the currency board regime of the 1990s and the high real exchange rate regime that followed. The former, characterized by a strong currency overvaluation, had a negative impact on economic activity and the labor market. However, the maintenance of a competitive real exchange rate does not by itself guarantee the sustained positive performance of the labor market, as it became evident in Argentina during the 2000s. Although the sizable depreciation of the peso -together with a positive international context- favored the expansion of output and employment, the initial concern of maintaining the real exchange rate at a competitive level was not continued with policies aimed to counteract the appreciation trend that appeared a few years after the implementation of the new regime.
Highlights
This document analyzes the interactions between macroeconomic regimes, the generation of employment and the dynamics of labor incomes based on the Argentine experience under two different macroeconomic configurations: the currency board regime of the 1990s and the high real exchange rate policy that followed after the collapse of the previous regime
Even though economic instability and its natural negative impact on labor and social indicators has been present in Argentina since the mid1970s, the structural reforms and macroeconomic changes implemented in the 1990s - in part seeking to revert this process - kept real incomes at really low levels, led to higher levels of labor precariousness and took open unemployment to unprecedented levels
This study aims to contribute to the current debate on macroeconomic regimes and their impacts on labor market performance and income distribution in Latin America, by analyzing the structural limitations that these countries face: macroeconomic volatility, low systemic efficiency and productivity, high dependency on natural resources, a large informal sector and low average remunerations
Summary
This document analyzes the interactions between macroeconomic regimes, the generation of employment and the dynamics of labor incomes based on the Argentine experience under two different macroeconomic configurations: the currency board regime of the 1990s and the high real exchange rate policy that followed after the collapse of the previous regime. This study aims to contribute to the current debate on macroeconomic regimes and their impacts on labor market performance and income distribution in Latin America, by analyzing the structural limitations that these countries face: macroeconomic volatility, low systemic efficiency and productivity, high dependency on natural resources, a large informal sector and low average remunerations. In this sense, the Argentine experience of the past two decades allows drawing lessons that can be relevant for the rest of the region.
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