Opening, reform and the labor market: experience of a decade of structural changes in Peru

(Available only in Spanish) This study examines the labor situation in Peru and finds evidence of a profound transformation in the labor market during the 1990s. First, the creation of jobs in the private sector speeded up enormously from 1992. However, the simultaneous strong growth of labor supply meant that the unemployment rate did not fall substantially during this period. Second, although the unemployment rates of the 1990s were higher than in the second half of the 1980s, the labor market reemployed displaced workers more rapidly. Third, the wages of individuals with similar characteristics have tended to level out among sectors and activities. Also during the 1990s the hiring of women and young workers increased in the formal sector leading to a decline in the differences in the composition of manpower between the sectors traditionally classified as informal, and the formal sector. Overall, employment growth, the increased capacity to reemploy displaced workers, and the fall in the formality premium suggest a more efficient performance in the labor market. However, this transformation is not without difficulties which generate new challenges for labor, education and economic policymakers in Peru.