Chile: Fiscal policy and employment. The contingency programme against unemployment

The Contingency Programme Against Unemployment was set up in Chile in 2006, in the framework of the Fiscal Responsibility Law. Its aim was to strengthen the array of counter-cyclical policies which has characterized the design and implementation of economic policies since 2001. This initiative links employment policy to fiscal policy, formalizing the decision to implement counter-cyclical employment policies, funded from general revenue, when the labour market at national level deteriorates. However, it also operates when signifi cant levels of unemployment are detected in particular geographic areas. In the framework of the present fi nancial crisis, the Programme has shown its efficacy, activated during the current year together with a number of other supplementary measures of a counter-cyclical nature. Results suggest positive effects on unemployment, since the latest information is that during the current year, the upward trend of unemployment across the nation was arrested, isolated from seasonal factors.