Quality of Employment Index for the tourism sector in developing countries

Abstract

Although job quality has become an active field of study over the last two decades in developed countries, it still remains an under discussed concept in developing regions such as Latin America, where the incidence of work informality and low wages are particularly high. As quality of employment is a multidimensional concept and not homogeneously defined in the literature, we follow a Principal Component Analysis (PCA) to build a Quality of Employment (QoE) Index for salary earners using household survey micro data of Uruguay from 2016-2019. Uruguay leads the Better Jobs Index launched by the Inter American Development Bank in 2017, which constitutes the only index with a macro-approach to measure quantity and quality employment conditions in the region. We consider several aspects of working conditions: employment, earnings, hours worked, occupational safety and social security coverage. We focus on the tourism sector, which presents low job quality characteristics at the same time it accounts for 7.2% of employment in Uruguay. Furthermore, we found a sex-based gap of employment quality against women in tourism, a difference that is not observed in the trade sector. QoE in tourism shows a greater dispersion in the distribution of employees, indicating the presence of more inequalities among these workers compared to those of trade. Other results show that job quality in tourism is lower for those unskilled, but that there are still many skilled workers facing low quality. Finally, if we consider the activities that conform tourism, workers do better in hotels and travel agencies rather than in restaurants and entertainment.