Making Labor Markets Work: Improving Productivity and Workers Welfare in Latin America and the Caribbean

Making labor markets work, for both productivity and worker welfare, is among the most important and most neglected levers available to Latin America and the Caribbean. The region's labor market combines decades of stagnant productivity with a structure dominated by excessive levels of self-employment and employment in micro-enterprises, where most workers lack social security coverage and capture only a fraction of the value they produce. Drawing on three decades of harmonized household survey data, institutional analysis, empirical evidence, and country case studies, this book analyzes how labor market institutions shape productivity, employment, wages and formality across the region. It also shows that modernizing employment regulation, delinking the financing of social protection from formal jobs, strengthening enforcement, and investing in skills and active labor market policies can raise productivity while ensuring workers' share in its gains, contribute to expand social protection and improve labor market outcomes.