Changes in Earnings in Brazil, Chile, and Mexico: Disentangling the Forces Behind Pro-Poor Change in Labor Markets

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In The Media

Changes in Earnings in Brazil, Chile, and Mexico: Disentangling the Forces Behind Pro-Poor Change in Labor Markets

Past financial crises and periods of slow growth in developing countries show that economic downturns may impact the income of the poor less severely than that of the non-poor. However, given the paucity of their initial incomes, even small reductions in earnings impose a heavy toll on the poor.

By Eduardo Zepeda, Diana Alarcon, Fábio Veras Soares, Rafael Guerreiro Osório

Published on Mar 23, 2009

Source: The International Poverty Centre

Changes in Earnings in Brazil, Chile, and Mexico: Past financial crises and periods of slow growth in developing countries show that economic downturns may impact the income of the poor less severely than that of the non-poor. However, given the paucity of their initial incomes, even small reductions in earnings impose a heavy toll on the poor. While safety nets and emergency assistance can help protect minimum levels of consumption, policies confronting economic crises should not be reduced to mitigation strategies. They should include interventions to strengthen human capabilities and improve the main asset of the poor: their labor. Times of economic crisis are opportunities to stimulate productive employment for the poor, so they can better cope with crisis and participate in recovery.

About the Authors

Eduardo Zepeda

Former Senior Associate, Trade, Equity and Development Program

Zepeda is inter-regional policy coordinator of the Development Policy and Analysis Division, Department of Economic and Social Affairs at the United Nations General Secretariat. He was previously a senior associate in the Trade, Equity, and Development Program at the Carnegie Endowment for International Peace.

Diana Alarcon

UNDP

Fábio Veras Soares

International Policy Centre for Inclusive Growth

Rafael Guerreiro Osório

International Policy Centre for Inclusive Growth

Economy North America South America

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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