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Unformatted text preview: orkers within the formal sector (affiliated to Social Security). In addition to the large public investment program included in the budget, the Government, through the Export Bank of Colombia (Bancoldex), will launch C$5 billion facility for funding small and medium enterprises. 90 EL SALVADOR Labor market facts Unemployment and Informal employment rates in El Salvador are produced annually and the most recent figures corresponds to year 2007, making impossible a short term inspection of the labor market. Unemployment has been quite stable around the 7% for the last 5 years, with a peak for youth unemployment in 2005 (see Figure 13). Informal employment, on the other hand, has declined since 2004, although it is still very high (see Figure 14). El Salvador Labor Market Indicators (2006‐2009) Figure 13 Figure 14 Unemployment rates Workers without formal labor contracts 16 100 14 80 10 Percentage Percentage 12 8 6 60 40 4 20 2 0 2001 2002 2003 2004 2005 15-22 years old 31-64 years old 2006 0 2007 2001 2002 23-30 years old 15-64 years old 2003 2004 15‐30 years old 2005 2006 2007 31‐64 years old Figure 15 Figure 16 Employment rates and social security contributors Annual change in Social Security contributors 10% 700000 8% 61 640000 610000 60 Annual % change 670000 SS Contributors 6% 4% 2% Employment Rate Contributors to Social Security Sep Sep May May Jan 08 Sep Jan 07 May Sep Jan 06 May Sep Jan 05 May Sep -2% 2007 Jan 04 2006 May 2005 Sep 2004 Jan 03 2003 May 2002 Sep 2001 Jan 02 550000 59 0% May 580000 Jan 01 % employed for 10+ years old 62 There is, however, monthly data on number of contributors to the Social Security System. Figure 15 shows that social security contributions are associated to the growth of economic activity and that they have declined noticeably since January 2007. Recent numbers are the lowest in more than five years, indicating a serious blow to the formal employment in the economy. 91 Recent Labor Market Policies The attention in El Salvador has been focused on the electoral process for the last months, and it is now when the future and current administration are discussing broad policy actions in a joint Crisis Team. The main messages in the public policy dialogue include the revision of the 2009 budget which should be revised to reflect the slower growth and more limited fiscal resources. On labor markets, the main discussion is about urban employment programs especially focused on the youth. This discussion is expected to be evolving rapidly as the administration changes in June 2009. Since employment and other interventions will require additional fiscal resources, the Government has been studying the rationalization of some subsidies with a regressive pattern (water, electricity). THE DOMINICAN REPUBLIC Labor market facts Unemployment rates in the Dominican Republic have been declining since year 2005. However, there seems to be a reversion of this trend during the second semester of 2008. In fact, the unemployment rate (broad definition)...
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