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Chile
Index
Figure 7. Employment by Sector, 1991
Source: Based on information from Chile, Instituto Nacional de
Estadísticas, Compendio estadístico, Santiago, 1991, Table
141-02.
With a lower rate of population growth, Chile's
working- age
population, which includes all those individuals more than
fifteen
and less than sixty-five years of age, represented 64
percent of
the total population in 1992 (see
table 7, Appendix). The
laborforce participation rate, or the ratio of those in the
labor force
over the working-age population, was 59 percent in August
1993; of
the total population, 37 percent were employed or were
seeking a
job. Participation rates typically differ by age and
gender. The
young participate in smaller proportions and join the
labor force
as they leave the education system. Women have
traditionally
participated at lower rates also. The participation rate
for men
was estimated at 76 percent and that for women at 32
percent in
1992. These figures had increased since the early 1980s
because of
the relative aging of the overall population and a
proportionately
greater entry of women into the labor force. In the
1980-85 period,
74 percent of men and 26 percent of women over fifteen
years of age
had been active in the work force.
The rate of unemployment declined steadily throughout
the 1987-
91 period. The overall rate of growth in employment for
the 1987-91
period was 3 percent per year. The rate was higher from
1987 to
1989 (5 percent), the period of fast recovery after the
economic
crisis of 1982-83. The most dynamic sectors during the
1987-89
period were construction and manufacturing, with average
rates of
employment growth of 20 percent and 11 percent per year,
respectively. Employment creation increased by 5 percent
again in
1992, and by the end of the year unemployment stood at 4.4
percent.
A greater than expected increase in the size of the labor
force,
mainly from women seeking employment, led to a slight
increase in
unemployment to 4.9 percent by late 1993.
The largest single component of the Chilean employment
structure was services, a category that includes health
workers,
teachers, and government and domestic employees
(see
fig. 7;
table 8, Appendix). Next was trade and financial services,
including the
real estate, banking, and insurance industries. Together
with
transportation and communications, these categories of the
services
sector of the economy employed 55.6 percent of the labor
force. The
most important of the productive activities in terms of
employment
was agriculture, forestry, and fishing, which employed
19.2 percent
of the labor force. If mining is included, this means that
21.5
percent of the labor force was employed in what is
typically
considered the economy's primary sector. The manufacturing
sector
employed 16 percent of the labor force, roughly the same
percentage
as in the mid-1960s; manufacturing's share had declined to
about 12
percent during the economic crisis of 1982-83. Employment
in what
is often considered the secondary sector of the economy
amounted to
23 percent, if the percentages engaged in construction and
in
electricity, gas, and water were added to that in
manufacturing.
In 1991 incomes had also almost recovered, for the
first time
in twenty years, to their 1970 average levels (see
table 9,
Appendix). During 1990 and the first months of 1991,
workers' wages
increased more rapidly than the national average. This
probably
resulted in some measure from the return to democracy that
had
enabled workers to exercise their rights more freely and
from labor
market conditions closer to full employment. Real incomes
continued
to rise during 1992 and 1993, reaching levels that
surpassed the
previous, but then unsustainable, peak established in
1971.
Nonetheless, the monthly wages of Chileans are, when
expressed
in dollars, much lower than incomes in the United States
(see
table 10, Appendix). According to these figures, which probably
understate high incomes and overstate lower ones, an
unskilled
worker made less than one-tenth the amount an
executive-Qoran
administrator-director made. The purchasing power of these
incomes
for daily necessities was, however, higher than their
dollardenominated equivalents suggest.
During the military government, unemployment rose well
above
its historical levels for the Chilean economy. There were
two
distinct shocks to the labor market. The first one took
place
around 1975 and can be related to the recessionary
conditions
created by anti-inflationary policies and to employment
reduction
in the public sector. The adjustment that followed was
very slow.
The second shock took place with the financial and
economic crisis
of 1982-83 and affected private-sector employment. From
1979 to
1981, the economy had entered into a recovery increasingly
oriented
toward production of nontradable goods, a pattern that was
not
sustainable given the speed at which international debt
was being
accumulated. In response to the devaluation of the
Chilean peso (see
Glossary) in 1982 and the macroeconomic management
that
followed, the economy shifted gears and reoriented
production to
tradable goods and services. In 1982 the unemployment rate
for the
country climbed to 19.4 percent, or 26.4 percent if those
participating in state-financed makeshift work programs
are
included. Yet the adjustment that followed took place at a
faster
pace. By 1986 the unemployment rate was 8.8 and 13.9
percent,
respectively. Chile's unemployment rate returned in the
early 1990s
to levels that characterized the country in the 1960s (see
table 11, Appendix).
The distribution of personal income is quite regressive
in
Chile in general and Santiago in particular, a tendency
that became
more pronounced during the military government (see
table 12,
Appendix). The data reveal that personal income in
Santiago is
strongly concentrated in the highest decile, which enjoys
about 40
percent of the total income. They also show that despite
the great
changes in the Chilean economy during this period, the
distribution
of personal income remains rather stable, even though a
somewhat
greater concentration can be seen in 1989 than in previous
years.
The new policies on income and taxes of the Aylwin
government were
expected to slightly reverse this trend
(see Future
Challenges of Democratic Consolidation
, ch. 4).
The distribution of consumption by household in
Santiago showed
a strong tendency toward the concentration of expenditures
in the
higher-income groups during the military government. The
figures
for the first two years of the Aylwin government show a
small
change in direction toward a more equitable distribution
of
consumption, although it is still significantly more
concentrated
in the richest quintile than in 1969 (see
table 13,
Appendix). The
data show that the richest quintile of households
increased its
consumption steadily from 1969 to 1989 but that it
declined in 1990
and 1991. Moreover, by 1991 the bottom two quintiles had
increased
their share of consumption slightly at the expense of the
fourth
quintile. Hence, the distribution of household consumption
was a
bit more equal in 1991 than in 1988.
These results must be interpreted with caution. The
distribution of household incomes is affected by the
average number
of income earners by household income levels, and in times
of
economic crisis the poorer segments may be forced to rely
on the
income of fewer household members. This apparently
happened in
Chile in 1983, when there were only 1.1 income earners in
the
poorest 20 percent of families; in the 30 percent of
families with
middle- to lower-middle incomes, there were 1.4 income
earners; in
the 30 percent of households in the middle- to high-income
group,
there were 1.7 income earners; and in the top 20 percent,
there
were two income earners per household. Because their
incomes were
also higher, the concentration of consumption in the
high-income
families was magnified. Similarly, the expansion of
secondary
school enrollments during the 1980s benefited the children
of
poorer households, but it may have deprived them of the
income
derived from youth employment.
Data as of March 1994
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