This Selected Issues paper on Luxembourg reports that exemplary high growth rates and prudent fiscal policies provided the financial basis for the welfare system. Social expenditures in per capita terms, even adjusted for the large number of cross-border workers, rank highest among European...

This primer aims to provide IMF macroeconomists with the essential information they need to address issues concerning health sector policy, particularly when they have significant macroeconomic implications. Such issues can also affect equity and growth and are fundamental to any strategy of...

This 2008 Article IV Consultation highlights that Tonga’s economy has shown resilience in the aftermath of the November 2006 riots and is now on a path to recovery. The key factor underpinning this resilience has been private investment. Donor-supported government reconstruction loans are...

This paper explores the effect of trade on the relative wage of less-skilled labor through its effect on world prices, which are typically exogenously given under the small open economy assumption. Using the 1995 international input-output data for APEC member countries, we numerically simulate...

This paper presents a simple framework that illustrates the link between skill-based wage differentiation and human capital acquisition given skill-biased technical progress. The analysis points to the economic costs resulting from labor market and income redistribution policies that prevent the...

This paper examines Honduras’s 2005 Article IV Consultation and Second Review Under the Poverty Reduction and Growth Facility. In the period 1960–2000, output growth in Honduras ranked among the lowest in the region. During the 1990s, when growth recovered in the rest of Central...

We evaluate empirically the impact of the dramatic 1991 trade liberalization in India on the industry wage structure. The empirical strategy uses variation in industry wage premiums and trade policy across industries and over time. In contrast to earlier studies on developing countries, we find...

This paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors--including the unemployment rate and generosity of the unemployment compensation system--as well as individual-specific determinants, such as human capital...

Labor markets around the world have become increasingly integrated over the last two decades, with the entry of China, India and the former Eastern bloc into the world trading system, the removal of restrictions on trade and capital flows, and rapid technological progress. At the same time, the...