Chile’s political establishment has been swept away – now there’s hope for change

After recent elections, Chile can shake off social and economic crisis, as long as it avoids the missteps of its neighbours, writes Kirsten Sehnbruch (LSE International Inequalities Institute). • n.b. republished courtesy of The Guardian; Creative Commons does not appl

Social protests in Chile: inequalities and other inconvenient truths about Latin America's poster child

The massive protests that exploded in Chile in October 2019 have left the country reeling from shock. The extensive participation of the population in demonstrations in Santiago and in all regional capitals, as well as the exceptional degree of violence and destruction that accompanied them, prompted President Piñera to declare a state of emergency that lasted for nine days, put the military on the streets and imposed a curfew. This has left many international observers wondering what went wrong in a country that has often been held up by mainstream opinion as the poster child to other Latin America countries. Relatively high growth rates have been accompanied by sharp declines in poverty, steady improvements in educational outcomes, and even recent declines in inequality1 – all in the context of a relatively high-functioning democracy. The question emerges whether these protests are an exceptional occurrence limited to the context of Chile, or whether they are an indication of a more widespread malaise in one of the world’s most unequal regions. In this article, we argue that the eruption of the social protests observed since October 2019 should not have surprised any close observer of Chile; in fact, they are paralleled by other protests in the region, such as in Ecuador, Colombia and Bolivia. However, the degree of violence, looting and incendiary attacks on metro stations, supermarkets, pharmacies and other businesses were indeed unexpected, as was the extent of human rights violations resulting from the response of the police and armed forces to the disturbances

Unemployment insurance in Chile: lessons from a high inequality developing country

One of the most complex social policy issues that developing countries commonly face is the question of how they can protect the unemployed. However, the analysis of unemployment insurance (UI) in developing economies with large informal sectors is in its infancy, with few papers providing solid empirical evidence. This paper makes several contributions to the development literature: first, it applies Chetty’s 2008 landmark work on UI to a developing country (Chile) and shows that the moral hazard effects expected by policy makers, who designed the system are minimal, while liquidity effects were entirely neglected. By means of an RDD, it analyses the Chilean UI system using a large sample of administrative data, which allows for an extremely precise analysis of how the system is working, thus providing invaluable empirical lessons for other developing countries. Second, this paper shows that it is not enough merely to quantify an effect such as moral hazard, but to understand its causes and implications. An extended unemployment period stemming from moral hazard has extremely different welfare implications than one stemming from a liquidity effect and should therefore result in different policy recommendations. Third, our results also highlight that the Chilean UI system is regressive overall, as it protects workers with higher income levels and more stable jobs much more than it protects vulnerable workers, who are also much more likely to become unemployed. Fourth, this paper shows that it is essential that developing countries should take into account the specific labour market and macroeconomic context when designing social policies as the incentives embedded in such a policy may not be enough to compensate for the limitations that arise from the structure of a labour market. This research thus has implications for many developing countries, which may also be considering the implementation of some form of UI and/or the partial or complete replacement of existing severance pay legislation with continuous contributions to individual savings accounts, as recommended by the international development institutions. Furthermore, even high-income developing countries, such as Chile, cannot rely on unemployment insurance alone when it comes to protecting workers from the fallout of an economic crisis or rapid changes in the labour market that generate unemployment. Any UI system must also be linked to other social protection mechanisms to provide complimentary benefits to workers with precarious jobs

Poor-quality employment: who is deprived in our labour markets?

Job quality is becoming a higher policy priority among governments in both developing and advanced economies. In public policy and economics a ‘good’ job tends to mean a well-paid job. Other social sciences, however, recognise that employment is a multidimensional phenomenon that requires careful conceptualisation and measurement to account for other employment conditions that also have a significant impact on the wellbeing of workers. These include job stability, types of contracts, and autonomy levels. This paper summarises recent research on this topic, addresses issues of data availability, and presents empirical evidence from both Latin America and Europe to show how multidimensional deprivations or clustered disadvantages in the labour market can be measured by means of a dedicated measure of poor-quality employment. It illustrates how, in both regions, this concept better captures deprivation in labour markets than simpler indicators of wages or informal employment, which are unidimensional and do not reflect the fact that many workers are deprived in more than one aspect of their employment conditions. This conclusion should matter to public policy, which tends to focus on different aspects of deprivation separately, if at all, without considering that multidimensional deprivations compound each other and thus affect the well-being of workers very negatively

The quality of employment and decent work: definitions, methodologies, and ongoing debates

This article explores the development of concepts related to the ‘quality of employment’ in the academic literature in terms of their definition, methodological progress and ongoing policy debates. Over time, these concepts have evolved from simple studies of job satisfaction towards more comprehensive measures of job and employment quality, including the International Labour Organization’s concept of ‘Decent Work’ launched in 1999. This article compares the parallel development of quality of employment measures in the European Union with the ILO’s Decent Work agenda and concludes that the former has advanced much further due to more consistent efforts to generate internationally comparable data on labour markets, which permit detailed measurements and international comparisons. In contrast, Decent Work remains a very broadly defined concept, which is impossible to measure across countries. We conclude by proposing three important differences between these two scenarios that have lead to such diverging paths: the lack of availability of internationally comparable data, the control over the research agenda by partisan social actors, and a prematurely mandated definition of Decent Work that is extremely vague and all-encompassing

Regional inequality in multidimensional quality of employment: insights from Chile, 1996–2017

This paper proposes a multidimensional synthetic index for measuring the quality of employment using the Alkire–Foster method. The results generated by this index highlight important differences between Chile's regions, but also a process of convergence, which has been mostly driven by regulatory changes and public policy rather than economic growth. The paper shows how much a synthetic index can contribute to regional analysis and how it can inform policymakers by focusing attention on the most vulnerable workers in regional labour markets

Social Policy Responses of the Chilean State to the Earthquake and Tsunami of 2010

This is the author accepted manuscript. The final version is available from SAGE via https://doi.org/10.1177/0094582X16648955 Decades of neoliberal policy have left Chile with a skeletal state that administers social policy through targeting and outsourcing in public-private partnerships that lack coordination. The reconstruction after the 2010 earthquake and tsunami responded to the emergency largely according to these same principles. While official reports on the reconstruction effort show a state that is complying with its goals, evidence from fieldwork in the city of Constitución illustrates that this method is highly inadequate in the context of a natural disaster. Chile should establish a social policy structure for natural disasters that allows for a rapid response to a social emergency based on universal or near-universal allocation criteria. Varias décadas de políticas neoliberales han dejado a Chile con un estado débil que simplemente administra las políticas sociales por medio de la focalización y las subcontrataciones en alianzas público-privadas que carecen de coordinación. La reconstrucción después del terremoto y el sunami de 2010 respondió a la catástrofe mayormente de acuerdo a estos mismos principios. Mientras los informes oficiales sobre los esfuerzos de reconstrucción muestran a un estado que cumple con sus metas, el trabajo de campo en la ciudad de Constitución demuestra que este método es decididamente insuficiente en el contexto de un desastre natural. Chile debe establecer unas estructuras de política pública para lidiar con los desastres naturales que permitan dar una respuesta rápida a las emergencias sociales en base a criterios de asignación universales o casi universales. </jats:p

The political economy of unemployment insurance based on individual savings account: lessons from Chile

In recent years, unemployment protection systems based on individual savings have been instituted in several developing countries. Chile was one of the first to establish such a system, which at the time was widely cited as a model for other countries. This article discusses the particular political context in which the Chilean system was created before examining how it works in terms of coverage and levels of benefits received by unemployed workers. The authors undertake a detailed analysis of the administrative data produced by the system and conclude that the insurance covers only a small proportion of the unemployed, as most workers generally had precarious jobs that did not allow them to contribute to the system consistently. The Chilean case illustrates how difficult it is to establish functioning unemployment insurance in developing countries with precarious labour markets. Based on the interaction between employment characteristics and the conditions imposed by the benefit system, the article assesses the efficacy of the Unemployment Insurance Savings Accounts (UISA) system and analyses whether it can indeed serve as a model for other developing countries

Human development and decent Work: Why some concepts succeed and others fail to make an impact

This paper examines the impact of the International Labour Office’s (ILO) concept of Decent Work on development thinking and the associated literature. We attempt to answer the question of what makes a development initiative successful by comparing the decent work approach to the United Nation Development Program's (UNDP) human development concept (in conjunction with the human development indicator). We consider that the latter has been one of the most successful development concepts ever to have been launched, while the impact of decent work by comparison has been limited. Our hypothesis relating to the question of what makes a development initiative successful has three fundamental components: first, a solid theoretical foundation has to justify the launch of a development concept. A second vital factor is the availability of sufficient national and internationally comparable data that enables researchers and policymakers alike to apply the concept, preferably by means of a synthetic indicator. Third, the political will and institutional structure of the development institution that launches a concept is a key factor, particularly if data availability is limited as countries then have to be persuaded to generate new data.The authors would like to thank the Cambridge Humanities Research Grants Scheme, the European Union (FP7 project ‘Nopoor’), and the Conicyt/Fondap Proyect number 15130009 for partial funding provided for this paper.This is the accepted manuscript. It's currently embargoed pending publication by Wiley. The final version is available at http://onlinelibrary.wiley.com/doi/10.1111/dech.12149/abstrac