employed. Shrinking employment in the manufacturing sector, presumably driven by economic reforms, has coupled with rising employment in: a) formal and informal transportation/telecommunication and financial/business services, informal personal services in Argentina, b) formal personal services in Brazil (with infornal manufacturing employment changing very little), c) formal retail and financial/business services, infornal transportation/telecommunication, social services, and financial/business and personal services in Costa Rica.

# **4.2 Unemployment**

Consistent with the region, job creation in Argentina, Brazil and Costa Rica has been considerably sluggish in the 1990s. As shown in Table 1, male unemployment rates increased in all three countries, especially in Argentina where it soared from 5.4% to 13.4%, followed by Brazil (4.7% to 7.6%) and much less in Costa Rica (4.5% to 5.8%). Strikingly, in Argentina the highest increases in unemployment were born by the informal salaried (6.1% to 18.3%) and the self-employed (7.4% to 18%), compared to a rise from 4% to 8.8% among the formal salaried. In contrast, the likelihood of becoming jobless increased for formal sector workers in Brazil (4.4% to 8.4%) and Costa Rica (4.8% to 6%), declined for the informal salaried (6.8% to 2.6% and 11.7% to 10%, respectively), and remained low for the self-employed.<sup>22</sup> Young (age 15-25) workers account for more than half of the unemployed in all three countries and show a rising probability of unemployment that doubles the national rates, going from 11.2% to 23.6% in Argentina, 8.2% to 14.6% in Brazil, and 9.4% to 12.4% in Costa Rica. Unemployment is also higher and rose among workers with primary education or less in Argentina (6.9% to 17.7%) and Costa Rica (5.2% to 7%), and for those with secondary or less in Brazil (5.6% to 8.5%).23 In addition, though they still remained lower, unemployment rates among workers with higher education rose more rapidly over the period, becoming four times higher in Argentina, three times higher in Brazil, and twice as high in Costa Rica.

The average **24** duration of unemployment spells also increased in Argentina (from 10.6 to 20.3 weeks), increased much less in Costa Rica<sup>25</sup> (62% of the unemployed remained jobless after 8 weeks, up from 52%) and decreased in Brazil (from 14.1 to 11.7 weeks). It increased significantly among formnal sector workers in Argentina (from 10.6 to 24 weeks) and Costa Rica, but also increased considerably among the informal salaried in Argentina (from 6.4 to 16.6 weeks). The longer durations in Argentina and Costa Rica have not affected the self-employed. Persistent unemployment became even more intense among the elderly in Argentina (14.5 to 24.8 weeks) and Brazil (15.8 to 19.3 weeks), and remained high in Costa Rica (75% of the elderly unemployed remained unemployed after

> 22 This is based on the unemployed's last sector of employment, which is available in all three country surveys.

> **23** This difference may be in part due to differences in the degree structure of the education system in Brazil. See Appendix I for details.

> 24 Median durations (not reported) are somewhat lower and change less over time, suggesting a high variance in long- termn unemployment spells within age and education groups.

> **25** Unemployment duration is coded in week intervals in the Costa Rican survey.

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