Designing Labor Market Institutions in Emerging and Developing Economies: Evidence and Policy Options

May 21, 2019

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Romain A Duval, and Prakash Loungani. Designing Labor Market Institutions in Emerging and Developing Economies: Evidence and Policy Options, (USA: International Monetary Fund, 2019) accessed November 24, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

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.

Subject: Emerging and frontier financial markets, Employment protection, Financial markets, Labor, Labor market institutions, Labor markets, Minimum wages

Keywords: Africa, Cash Transfers, Collective bargaining, Developing economy, Emerging and frontier financial markets, Employment Protection, Firm level, Income group, Labor Market Institutions, Labor markets, Minimum Wage, Minimum wages, Monopsony power, Risk pooling, SDN, Severance pay, Social Assistance, UI system, Unemployment Benefits, Unemployment insurance, Wage inequality

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2019/004
Stock No:

SDNEA2019004
ISBN:

9781498313261
ISSN:

2617-6750

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