Gendered impacts of real effective exchange rate trends on job quality in Latin America

For the past three decades, several Latin American countries adopted the neoclassical macroeconomic tripod: floating exchange rates, inflation targeting, and a primary budget surplus. Such a strategy tends to appreciate real effective exchange rates (REERs) by decreasing domestic inflation. Together with the commodity price boom of the 2000s, the industrial sector suffered severe pressures in the region, with consequences for the sectoral composition of gross domestic product (GDP) and labor market demand. Related literature suggests that such movements tend to decrease employment generation and the women/men employment ratio. This chapter expands that literature by mapping how REER trends impact job quality for women, as measured by women’s weekly earnings in an occupation relative to the national median wage. The analysis uses a panel of labor force survey and macroeconomic data from 15 Latin American countries between 1991 and 2018, and finds that REER appreciation tends to decrease women’s share of good jobs in an economy.