Fynsa
We believe that, like most things in economics (or life), the reasons are multifactorial and our intention is to expose to the reader, in a didactic and simple way, what are the other reasons for this. other causes that have been talked about a little less.
First, on the labor supply side labor supplyFirst, on the labor supply side, there are sociodemographic changes that have accelerated recently. In the age range 15 - 24 years the phenomenon of the NiNis is well known, which, although they have decreased during the last year, continue to number over 300 thousand people. 300 thousand people. Although the participation of this segment is naturally low (for study reasons), the unemployment rate is much higher than the national total: 19.7% vs. 8.5%..
If we are a bit more demanding and add those who did not look for a job, but would like to work, things get even more complicated: 36.6% vs. 16.5%.. Although these figures are worrisome, they are nothing compared to the dynamic problem that causes this, since these are people who are not accumulating experience or developing skills. Thus, their eventual entry into the labor market will be into less qualified jobs, with a higher probability of informality (ergo, less social security) and lower salaries, which causes gaps that on average do not diminish during the labor trajectory.
In the same vein, the fall in the birth rate falling birth rate poses a twofold challenge. poses a twofold challenge. It would not be the first time in history that a generational cohort has lagged behind the previous one, especially those that have experienced significant economic crises, but had the possibility of recovering and/or was normalized by the following generational cohort that had not faced that crisis. Now, the generation that should be entering the market is not doing so and unfortunately is not going to be "normalized" by the next generation either, basically because that generation is not being born!
Surely all this is related, since, as the relative wage bill of this age range decreases, the probability of higher births is reduced. In simple terms: a kilo of baby becomes unaffordable.
What is described here generates costs that, in aggregate, are greater than private costs alone, therefore, there is room for public policies. The "formulas" are not new and have been widely suggested, but unfortunately have little resonance with decision makers.
Some of these include improving access to and quality of preschool education, favoring labor flexibility for workers and employers with respect to caregivers, reducing school dropout rates, aligning incentives for the formalization of jobs that are currently informal, etc.
None of this will solve the problem as a whole, but it will at least help to ensure that it does not continue to worsen and that the inequalities of the following generations are not greater than they are today. An analysis of the causes from the point of view of labor demand will be discussed next time.
