Labour Markets, Poverty and Adjustment

The labour market is one of the most important channels through which adjustment programmes affect the poor. Adjustment's poverty impact will differ between competitive and imperfect labour markets. Two effects on poverty are highlighted: changes in real wages arising from changes in labour demand and prices, and the reallocation of labour between sectors. These effects can work in the same or opposite directions, depending on the economy's structure. Since some workers may gain, and some may lose, workers can have conflicting interests during adjustment