Most downsizing operations show high financial returns, but their economic returns depend crucially on their design. After comparing public sector employment across countries, the author analyzes the optimal design of downsizing operations from a microeconomic perspective. The author discusses...

Stories on the positive and negative effects of globalization on workers in developing countries abound. But a comprehensive picture is missing and many of the stories are ideologically charged. This paper reviews the academic literature on the subject, including several studies currently under...

Minimum wages in Indonesia were tripled in nominal terms, and doubled in real terms, in the first half of the 1990s. The author evaluates the effects of this hike on wage earnings, wage employment, and investment. After describing Indonesia's minimum wage policy and surveying the literature on...

It seems natural to attribute to wage rigidity (stemming from highly distortionary labor policies) the over-valuation of the CFA (Communaute Financiere Africaine) franc after the negative external shocks of the 1980s. Using a variety of data sources, the author assesses the actual rigidity of...

The authors use the common agency approach to analyze the joint determination of product and labor market distortions in a small (developing) open economy. Capital owners and union members lobby the government on tariffs and minimum wages, while factors of production in agriculture (the informal...

In Peru, as in many other developing countries, employers have the legal obligation to compensate workers who are dismissed through no fault of their own. Is this an efficient mechanism for providing income support to the unemployed? The authors seek an answer to this question, using individual...

Sri Lanka's high unemployment rate has been attributed to a mismatch of skills, to queuing for public sector jobs, and to stringent job security regulations. But the empirical evidence supporting these explanations is weak. The author takes a fresh look at the country's unemployment problem,...

Public sector restructuring, including labor downsizing, has been one of the main areas of policy activism in developing countries, and transition economies. But little is known about its actual effects. The authors use panel data on Colombian enterprises spanning more than one decade, to assess...

The authors use the 1994 Living Standards Measurement Survey to show that the impact of labor market regulations, namely mandated benefits, is mitigated by reducing the base earnings on which they are calculated. Therefore, market regulation neither accounts for labor market segmentation nor for...

Privatizing, or restructuring state-owned enterprises, may lead to massive layoffs, but the number of redundant workers is usually unknown beforehand. The authors estimate labor redundancy by comparing employment levels across enterprises with different degrees of state ownership. In their...