Brazil's Ministry of Labor does not take labor informality lightly, carrying out inspections and cracking down on the many businesses that hire workers “off the books.” While these inspections are often successful in catching and penalizing firms that avoid the costly regulations involved in hiring formal workers, they also come with surprising, not always positive, side … [Read more...] about Tackling Informality in Brazil: The Hidden Costs of Labor Inspections
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Tackling Informality for Fiscal Health in the Post-Pandemic Period
After significant efforts by Latin American and Caribbean governments to shore up businesses and households during the COVID-19 pandemic, the region in 2021 had a very high average fiscal deficit of 5% of GDP, more than two percentage points higher than before the pandemic. It also had a soaring average debt ratio of 70% of GDP. The IDB’s recently released 2022 Latin … [Read more...] about Tackling Informality for Fiscal Health in the Post-Pandemic Period
Latin America Needs Greater Investment and Productivity. This Is Why
As the global economy gains strength and Latin America and the Caribbean recovers from recession, the region is actually falling further behind, continuing to lose its share in global GDP and putting in jeopardy the aspirations of its growing middle class The reasons behind this are complex. But low investment and productivity are fundamental factors. They require significant … [Read more...] about Latin America Needs Greater Investment and Productivity. This Is Why
When Less Informality Means Less Inequality
To work in the informal sector, as roughly half of Latin Americans do, is to labor in the shadows. It often means working for firms that neither register with authorities, pay taxes or abide by labor regulations. It is to be deprived of health insurance and contributory pensions. And it generally means limited career advancement, as most firms employing informal workers do … [Read more...] about When Less Informality Means Less Inequality
Is Latin America Failing Its Workers?
The deaths of 17 workers building facilities for the 2018 World Cup in Russia, along with a lack of employment contracts and harsh working conditions at the sites, have made headlines recently. They have provoked denunciations by rights activists and drawn attention to labor abuses. But Russia is not alone in failing to protect its workers. Latin America also suffers real … [Read more...] about Is Latin America Failing Its Workers?