The New Economic Policy and Organized Labor

The severe deterioration of the Bolivian economy in the first half of the 1980s and the slow recovery afterwards have had direct and strong effects on the behavior of the labor market. The crisis of the early 1980s greatly damaged the work environment: there is evidence that much of the labor force was not employed in productive activities and, possibly, the distribution of income worsened. In addition to the resulting loss in welfare, the negative GDP growth rates caused the Bolivian productive structure and employment to become even more heterogeneous. Adjustments in the Bolivian labor market have proceeded in different ways to those of the industrial and semi-industrial economies. Whereas iii the latter adjustment generally takes place in the employment level, in the former there was mainly, but not only, a change in the composition of employment by sector of activity. Especially significant was the expansion of services and other components of the tertiary sector, as the unemployed were forced to turn to this sector for employment. Consequently, severe imbalances between and within the several economic sectors appeared.