Whereas an unusually sharp fall in the labour participation rate mitigated the labour market impact of the economic slowdown in 2014, a year later the labour market’s adjustment to the cooling regional economy reverted to the more usual historical patterns in Latin America and the Caribbean. 19 In 2015, the decline in labour participation stopped, and the larger number of individuals seeking income in the job market amid slack labour demand pushed up both open unemployment and time-related underemployment. It also caused a deterioration in employment composition, with a larger proportion of employment appearing in low-productivity activities, particularly own-account work, and very sparse creation of wage employment. As a result, average labour productivity declined sharply. In some countries, rising inflation also eroded real wages, which, compounded by the weak growth of employment and its deteriorating composition, reduced household purchasing power.

Related Subject(s): Economic and Social Development
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