OECD Reviews Of Labour Market And Social Policies: Colombia 2016 (Volume 2016)

216 Pages·2016·3.86 MB·English

by  Organization for Economic Cooperation and Development

OECD Reviews of Labour Market and Social Policies 2
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COLOMbia
OECD Reviews of Labour Market
The Colombian Government has undertaken important reforms in recent years to
address labour market and social challenges, and the efforts are slowly paying off. and Social Policies
However, further progress is needed to enhance job quality and well-being for all.
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iSbn 978-92-64-24467-2
81 2015 24 1 P

OECD Reviews of Labour
Market and Social
Policies:
Colombia
2016
ThisworkispublishedundertheresponsibilityoftheSecretary-Generalofthe
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Pleasecitethispublicationas:
OECD (2016), OECD Reviews of Labour Market and Social Policies: Colombia 2016, OECD
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3
FOREWORD –

Foreword
This volume consists of a background report prepared by the OECD
Secretariat to support the Labour Market and Social Policy Review of
Colombia, which is currently being undertaken by the OECD Employment,
Labour and Social Affairs Committee as part of the process for Colombia’s
accession to the OECD [see the Roadmap for the Accession of Colombia to
the OECD Convention: C(2013)110/FINAL]. In accordance with
paragraph 14 of Colombia’s Accession Roadmap, the Employment, Labour
and Social Affairs Committee agreed to declassify the report in its current
version and publish it under the authority of the Secretary General, in order
to allow a wider audience to become acquainted with the issues raised in the
report. The publication of this document and the analysis and
recommendations contained therein, do not prejudge in any way the results
of the ongoing review of Colombia by the Employment, Labour and Social
Affairs Committee as part of its process of accession to the OECD.
The review was prepared by Horacio Levy, Thomas Liebig and
Veerle Miranda (project leader), supported by Rodrigo Fernandez and Hervé
Philippe for statistical work and Monica Meza-Essid for project assistance,
under the overall supervision of Monika Queisser. Valuable comments were
provided by Stefano Scarpetta, Mark Pearson and many other OECD
colleagues. The report also includes comments from the Colombian Ministry
of Labour and the Department for Social Prosperity.
OECD REVIEWS OF LABOUR MARKET AND SOCIAL POLICIES: COLOMBIA 2016 © OECD 2016

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TABLE OF CONTENTS –

Table of contents
Acronyms and abbreviations ........................................................................................... 9
Executive summary ....................................................................................................... 11
Assessment and recommendations ................................................................................ 13
Chapter 1. Strong growth but unequal Colombian society ...................................... 35
1. Sustained economic growth owing to a mining boom and prudent
macroeconomic management .................................................................................... 36
2. Improved labour market outcomes hide deep structural problems........................ 38
3. High but slowly declining income inequality and poverty .................................... 47
4. Changing patterns of migration ............................................................................. 52
5. Internal displacement related to conflict and violence .......................................... 56
6. Conclusions ........................................................................................................... 57
Notes ......................................................................................................................... 58
References ................................................................................................................. 58
Chapter 2. Towards more equal job opportunities in Colombia ............................. 61
1. Introduction ........................................................................................................... 62
2. Policies addressing labour informality .................................................................. 62
3. High minimum wage has become the wage norm for many formal and
informal employees ................................................................................................... 71
4. A new unemployment protection system has been put in place ............................ 76
5. Labour legislation is circumvented by civil-law contracts ...................................... 79
6. Conclusions ........................................................................................................... 89
Notes ......................................................................................................................... 92
References ................................................................................................................. 93
Chapter 3. Enforcing labour rights in Colombia ...................................................... 97
1. Introduction ........................................................................................................... 98
2. Trade union activities are affected by high rates of violence ................................ 98
3. Challenging industrial relations .......................................................................... 107
4. The labour inspection system has been strengthened but challenges remain ......... 121
5. Slow labour justice system despite efficient pre-court conciliation mechanism .....129
6. Conclusions ......................................................................................................... 130
Notes ....................................................................................................................... 133
References ............................................................................................................... 135
OECD REVIEWS OF LABOUR MARKET AND SOCIAL POLICIES: COLOMBIA 2016 © OECD 2016
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– TABLE OF CONTENTS

Chapter 4. Improving redistribution in Colombia through social policy ............. 141
1. Introduction ......................................................................................................... 142
2. Targeting social protection in Colombia ............................................................. 148
3. Pensions .............................................................................................................. 150
4. Health .................................................................................................................. 152
5. Family .................................................................................................................. 153
6. Gender ................................................................................................................. 159
7. Housing ............................................................................................................... 160
8. Policies for population in poverty or vulnerability.............................................. 163
9. Conclusions ......................................................................................................... 171
Notes ....................................................................................................................... 175
References ............................................................................................................... 176
Annex 4.A1. UNIDOS: Dimensions and targets ...................................................... 183
Chapter 5. Making the most out of international migration for Colombia .......... 185
1. Introduction ......................................................................................................... 186
2. Engaging with the diaspora ................................................................................. 186
3. Policies on return migration ................................................................................. 192
4. Policies on immigration and integration of immigrants ...................................... 196
5. International co-operation: A promising path with mutual benefits .................... 204
6. Conclusions ......................................................................................................... 208
Notes ....................................................................................................................... 210
References ............................................................................................................... 210

Tables
Table 1.1. Youth, women and older workers seized new employment opportunities .. 39
Table 2.1. Distribution of expenditure based on the 4% employer contribution,
1982 and 2014 ........................................................................................................... 70
Table 2.2. Complementary benefits provided by the Colombian Government for
workers who voluntarily save their unemployment payments .................................. 78
Table 2.3. Colombia has a very high share of employees with fixed-term
or TWA contracts ...................................................................................................... 85
Table 2.4. Evolution of third-party contracting ......................................................... 88
Table 3.1. Significant decline in violence against trade union leaders
and members ............................................................................................................. 99
Table 3.2. Collective agreements account for a declining share of collective
bargaining ................................................................................................................ 113
Table 3.3. Arbitration tribunals are increasingly used to solve labour conflicts ..... 120
Table 3.4. Number of labour inspectors and their activities .................................... 123
Table 3.5. The majority of fines are related to a lack of co-operation by the firm .. 127
Table 3.6. Conciliation is frequently used ............................................................... 130
OECD REVIEWS OF LABOUR MARKET AND SOCIAL POLICIES: COLOMBIA 2016 © OECD 2016
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TABLE OF CONTENTS –

Table 4.1. Public social spending reduces poverty and inequality, but benefits
the rich most ............................................................................................................ 146
Table 4.2. SISBEN registration ............................................................................... 149
Table 4.3. Distribution of expenditure from resources from 4% contribution,
1982 and 2014 ......................................................................................................... 154
Table 4.4. Early childhood care: Distribution of resources, 2013 ........................... 159
Table 4.A1.1. Dimensions of Red UNIDOS ........................................................... 183

Figures
Figure 1.1. GDP and GDP per capita in Colombia and OECD countries ................. 37
Figure 1.2. Labour market improvement lagged economic growth ......................... 38
Figure 1.3. Low incidence of long-term unemployment ........................................... 40
Figure 1.4. The share of self-employment in Colombia is much higher than
in OECD countries .................................................................................................... 41
Figure 1.5. Informality in Colombia is high among both employees
and self-employed ..................................................................................................... 42
Figure 1.6. Rate of informal labour by demographics, 2013 .................................... 44
Figure 1.7. Large earnings gap between formal and informal workers ..................... 45
Figure 1.8. Low transition rates suggest labour market segmentation ...................... 46
Figure 1.9. Employees with fixed-term contracts are more likely to move
into the informal sector ............................................................................................. 46
Figure 1.10. Income inequality levels and trends in Colombia
and OECD countries ................................................................................................. 48
Figure 1.11. Poverty levels and trends in Colombia and OECD
countries .................................................................................................................... 50
Figure 1.12. Highly-educated people are over-represented among
Colombian emigrants ................................................................................................ 53
Figure 1.13. Immigration to Colombia is marginal compared with
OECD countries ........................................................................................................ 55
Figure 2.1. Evolution in formal and informal job creation ........................................ 67
Figure 2.2. The minimum wage is set at a very high level ........................................ 72
Figure 2.3. Compressed wage distribution due to high minimum wage ................... 74
Figure 2.4. Employment protection in Colombia is around OECD average ............. 81
Figure 3.1. Trade union density in Colombia is at the lower end of the
OECD ranking ......................................................................................................... 110
Figure 3.2. Collective bargaining coverage in Colombia is at the lower end
of the OECD ranking .............................................................................................. 113
Figure 3.3. Recent hirings have brought the number of workers per labour
inspector closer to international standards .............................................................. 123
Figure 4.1. High child and elderly poverty and small income redistribution
in Colombia and OECD .......................................................................................... 143
OECD REVIEWS OF LABOUR MARKET AND SOCIAL POLICIES: COLOMBIA 2016 © OECD 2016
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Figure 4.2. Public and mandatory private social spending in Colombia is much
lower than the OECD average ................................................................................. 145
Figure 4.3. Colombia redistributes less than Brazil and is more unequal than
Mexico and Peru ..................................................................................................... 148
Figure 4.4. Early childhood care users by type of care, 2004-13 ............................ 158
Figure 4.5. Housing tenure ...................................................................................... 162
Figure 5.1. Remittance inflows to Colombia show a strong decline ....................... 190
Figure 5.2. The share of labour migration among inflows is high .......................... 200
Figure 5.3. Immigration flows to Colombia are low compared with
OECD countries ...................................................................................................... 201
Figure 5.4. Applications for recognition of foreign qualifications show
a strong upward trend .............................................................................................. 207
OECD REVIEWS OF LABOUR MARKET AND SOCIAL POLICIES: COLOMBIA 2016 © OECD 2016