Social protection to the informal sector in Argentina:
the role of minimum wage and income transfer policies
This team of PEP-supported researchers have found that, in Argentina, increasing the minimum wage level does not reduce employment, nor increase informality, and that conditional cash transfers do not reduce the economic participation of beneficiaries. Find out more through the PEP working paper 2015-05, and related PEP policy brief 120.
You may also download the following PEP impact brief to find out all about the outcomes and impact of this PEP-supported project - in terms of capacity building, promotion of local expertise and policy influence.
Context and objectives
This project is an analysis of the characteristics of minimum wage and income transfer policies implemented in Argentina, since the post-crisis period of 2001-02 and through 2012.
Indeed, since 2003, Argentina has not only modifed its minimum wage policy sereval times, but also implemented two major cash transfer programs, the Pension Plan Inclusion and Universal Child Allowance (which, togother, cover about 15% of the population).
The purpose of this project was thus to provide policy makers with useful evidence regarding the consequences that modifications of these policies (i.e. levels of minimum wage and/or of income transfers to poor households) might have on the functioning of the labour market.
In particular, the researchers attempted to produce evidence regarding the incentives/disincentives that these policies might have generated (in the labour market), and to assess their effects on employment, wages and distribution, with special emphasis on the informal sector.
Method and findings
To produce such evidence, the researchers have applied a series of analytical techniques on data from the national Permanent Household Survey, available since 2003 and for each year of the concerned period (until 2012). Find out more about the method.
Overall, the researchers found that, in Argentina 1) increasing the minimum wage level does not reduce employment, nor increase informality, and that 2) conditional cash transfers do not reduce the economic participation of beneficiaries. Find out more throught the following PEP publications - in particular the working paper 2015-10 and policy brief 120.
Policy engagement and impact
Initially, the project (research questions and objectives) was designed using the inputs and conclusions obtained by the research team through academic seminars and conferences - both national and international - where these topics were discussed amongst various acamedic and government institutions, and other policy stakeholders
The research team was later called upon to attend periodic consultation meetings with top officials from the Ministry of Labour, Employment and Social Security of Argentina, the International Labour Organization (ILO) Office in Buenos Aires and other relevant institutions, during which they were asked to provide their inputs (based on the evidence produced in this project) to inform discussions and debates regarding the "formulation/revision of the national labour policy" - in order to enhance the quantity and quality of employment in Argentina.
As a result of these consultations, two national observatories were created: the “Minimum Wage Observatory” and the “Social Protection Observatory”. Through these Observatories, the same PEP researchers were mandated to produce monthly reports in order to provide information on the evolution, characteristics and scope of the minimum wage and social protection policies. These reports are sent to several institutions (including government agencies, such as the Ministry of Labour, Working Committees of the Senate, but also international agencies, such as ILO, chambers of commerce and trade unions) in order to provide inputs for decision-making.
In addition, the consultations held between the research team and the Ministry of Labour have resulted in the decision to develop of a special research programme on income transfer for youth. Through this initiative, the researchers will collaborate with Labor Ministry officials to exploit the database of the more than 700,000 young beneficiaries of the Ministry’s employment programs.
Download this "PEP impact brief" to find out more about the impact of this project in terms of capacity building, promotion of local expertise and policy influence.
Dissemination - conference presentations and media
In addition to these direct consultation meetings, as well as internal seminars given at specific dependencies of the Minister of Labor, the research team members were also invited to present their work and findings during a number of national and international conferences.
At the national level:
- The PEP research team organized a national policy conference in Buenos Aires, in November 2014, to communicate and discuss their research findings to/with relevant policy makers and other stakeholders at the national level. This event resulted in further collaborations and consultations between the team members and the Ministry of Labor, ILO, as well as the Friedrich Ebert Stiftung (FES) Foundation. Find out more about this particular event and related outcomes.
- Fernando Groisman, the team leader, also gave presentations during previous conferences held in Buenos Aires: Jornada CITRADIS, Congreso Internacional de Economía (ECON2013), as well as during the National Congress of the Asociación de Especialistas en Estudios del Trabajo.
- The project's issue and outcomes (findings and recommendations) were also featured in over 15 mass media reports/discussions, including in newspapers (Pagina 12, Revista Veintitres and Tiempo Argentino), in television programs (C5N and Metro), and major radio newscasts (Radio Nacional and Radio UBA).
At the international level, the team was also invited to present their PEP research work in :
- Kassel (Germany), during the 2014 Annual Conference of the International Center for Development and Decent Work (ICDD), on the theme "Reflections on MDG 1 ‘Decent Work for All’: Where Do We Stand?"
- Geneva (Switzerland), during the 3rd ILO Conference on "Regulating for Decent Work: Regulating for Equitable and Job‐Rich Growth (RDW)".
- Bogota (Colombia), during an international seminar on "Labor Market, Informality and Social Protection", organized by the University of Colombia
Find out more about the project’s related issues and national context through the series of links below (all in Spanish):
The project described above is one of the several projects selected for support under the PEP research and capacity building initiative for Policy Analysis on Growth and Employment (PAGE) in developing countries. The PAGE program is co-funded by UK's Department for International Development (DFID) and Canada's International Development Research Center (IDRC).
This particular project was selected in June 2013, following the first of three competitive calls for proposals of the PAGE initiative. So far, a total of 42 projects have been selected for support under the two first PAGE funding rounds. Find out more