Microeconomic Issues Of Labor Markets In Developing Countries

This paper deals with labor market structures in developing countries and the impact of government policies on rural and urban labor markets. The central concern in analyses of employment is absorption of labor. Governments try to influence the demand for labor so that more members of the labor force are absorbed into productive employment. Employment outcomes are often the by-products of government policies that affect economic growth as a whole. This paper concentrates on factors that influence the structure and functioning of labor markets. In Chapter 1, a schematic picture of labor markets is presented. Chapters 2 and 3 analyze the salient features of the workings of rural and urban labor markets and discuss some important government policies that affect the functioning of these markets. The paper concludes that Government intervention in both rural and urban labor markets has often been less than successful, sometimes because their policies were based on incorrect assumptions. At other times, these policies have achieved less because the government also adopted other policies that tended to contradict the goal of providing jobs.

This book is an attempt to capture and analyze several idiosyncratic features of industry and labor in the developing world. Available books and graduate-level texts in labor economics largely discuss industrial and labor market situations prevalent in developed countries, where well-defined institutional arrangements and regulations create a very different scope of analysis. The patterns of choice in training and contracts in the labor market more apparent in developing and transition countries are discussed, as are the information-theoretic results. The book also critically examines labor migration, a context in which the developing and transition countries represent large sources in the present global order. A broad base of empirical observations from industries is used to develop analytical conjectures on risk-sharing arrangements between workers and employers, while strong intuitive explanations are combined with relevant mathematical and graphical derivations, ensuring the book’s readability among graduate students pursuing courses in labor economics and industrial economics for developing and transition countries. The book may also serve as a valuable reference guide for all students in advanced human resources courses at management schools. Presenting state-of-the art research findings in all of its chapters, the book discusses numerous institutional peculiarities of the developing world, making the results distinct in view of the general scope of labor economics.

Abstract: The authors study the dynamics of three developing country labor markets using recent advances in the estimation of continuous time Markov processes. They first examine the flows of workers among five states: three types of paid labor, unemployment, and out of the labor force. The authors find a high degree of commonality in patterns of worker flows among the three countries and attempt to compare the flexibility of the markets by examining an index of overall mobility. Second, they seek to establish whether the issues of advanced country labor markets apply to developing country markets or whether the latter constitute a different phylum. Paralleling the mainstream literature on the role of being out of the labor force as discouraged unemployment, the authors then identify some common stylized facts about the role of the informal self-employed and salaried sectors and to what degree they serve as a holding pattern versus a desirable alternative to formal sector work. In the process, the authors identify very strong differences in mobility patterns between men and women and attempt to shed some light on whether these differences arise from discrimination or perhaps instead the constraints imposed by household responsibilities. Finally, they study labor market adjustment across the business cycle in Mexico and identify patterns of job creation and destruction among the three paid sectors and confirm the mainstream view of the role of out of the labor force as a procyclical phenomenon.

Labour Markets in Low-Income Countries addresses some of the most important issues affecting labour markets in low-income countries. It builds heavily on the new research evidence that has been provided by the programme on Growth and Labour Markets in Low-Income Countries (GLM|LIC), which was created as a partnership between UK Department for International Development (now part of the Foreign, Commonwealth, and Development Office) and the German IZA- Institute of Labor Economics in 2011. The programme has contributed to the growing interest in understanding labour markets in the poorest countries by producing high-quality research outputs and policy documents, as well as through interactions with various stakeholders and impacts on programs and policies. Across nine chapters dealing with different aspects of labour markets in developing countries, David Lam and Ahmed Elsayed provide lessons about what kinds of labour market programmes and policies can make a difference. Some of these lessons are about the difficulties that many well-intentioned programmes face when they are implemented. Vocational training programmes, for example, one of the most widely implemented labour market interventions, have a disappointing record when subjected to rigorous evaluation. Public Works programmes have also had mixed results when rigorously evaluated. Other lessons are more positive, however. Some of the modifications and additions to traditional programmes that have been tested recently in different projects have had encouraging results. The book provides evidence of what works and what doesn't in areas such as skills training, worker-firm matching, rural labour markets, migration, youth unemployment, and women's empowerment. This is an open access title available under the terms of a CC BY-NC-ND 4.0 International licence. It is free to read at Oxford Scholarship Online and offered as a free PDF download from OUP and selected open access locations.

Globalization, Technological Change and Labor Markets is an edited collection of papers drawn from the conference held at the American Institute for Contemporary German Studies in June 1997. This conference brought German and American perspectives to bear on the complex issues of global competition, technological change, and labor markets in the welfare state. The contributions are organized into five sections dealing with various aspects of the problem: (1) Macroeconomic Perspectives; (2) Microeconomic Aspects; (3) the German Model of Labor Relations; (4) the Social Market Economy; and (5) Trade Policy and Environmental and Labor Standards. This edited collection seeks to explore many of the key issues surrounding the debate over the impact of globalization and technological change on labor markets in Europe and the United States. `This volume provides path-breaking insights as to why globalization has wreaked havoc on the welfare states that had once propelled Western Europe and North America to an unprecedented standard of living throughout the post-war period. The high level of scholarship contained in the individual chapters forms a compelling argument that will convince even the most resistant skeptics that the days of the classic welfare state are numbered. More importantly, this book is filled with concrete suggestions based on careful economic analysis as to how technological change and globalization can be harnessed in conjunction with a new role of the state to provide a high standard of living.' David B. Audretsch, Ameritech Chair of Economic Development, Indiana University

Canada and the countries of Latin America are in the midst of major changes and choices in the area of labor markets and related social policy. These decisions are likely to have profound consequences for the quality of life of workers throughout the hemisphere. Labor Market Policies in Canada and Latin America: Challenges of the New Millennium reviews the evidence of Canada and Latin America on three major labor policy instruments - unemployment insurance, minimum wages and training - and on the effects of the payroll taxes which are the main means of funding the unemployment insurance system and other components of social expenditure. This is the first study attempting an in-depth comparison of these labor policy instruments between Canada and Latin America. The useful juxtaposition of Canadian and Latin American experiences comes at a time when the trend in Canada is to back away from the perhaps overly generous or ineffectively administered elements of the labor legislation/social security net and when Latin American countries have undertaken significant reforms of their past systems but require further changes to move toward the sorts of legislation and support systems that characterize developed countries. The experiences of Canada and Latin America are mutually relevant since all are small economies forced to adjust to events at the world or hemispheric level and most are inclined to approach policy in an intermediate fashion which falls between the more market-oriented American and the more interventionist European models. Together with its comparative aspect, this volume attempts a more balanced and in-depth assessment in each of the policy areas than has hitherto been available. The gradually increasing base of available empirical data on the period after the reforms has been used in the studies, which provide thorough syntheses of the available research for Canada and Latin America.

This paper discusses theoretical aspects and evidences related to designing labor market institutions in emerging market and developing economies. This note reviews the state of theory and evidence on the design of labor market institutions in a developing economy context and then reviews its consistency with actual labor market advice in a selected set of emerging and developing economies. The focus is mainly on three broad sets of institutions that matter for both workers’ protection and labor market efficiency: employment protection, unemployment insurance and social assistance, minimum wages and collective bargaining. Text mining techniques are used to identify IMF recommendations in these areas in Article IV Reports for 30 emerging and frontier economies over 2005–2016. This note has provided a critical review of the literature on the design of labor market institutions in emerging and developing market economies, and benchmarked the advice featured in IMF recommendations for 30 emerging market and frontier economies against the tentative conclusions from the literature.