Mauritius: Unemployment and the Role of Institutions

November 1, 2003

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James Y. Yao, and Calvin A McDonald. Mauritius: Unemployment and the Role of Institutions, (USA: International Monetary Fund, 2003) accessed December 30, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Despite strong economic growth, a "U"-curve unemployment phenomenon in Mauritius can be observed. Unemployment plunged from 21 percent to less than 4 percent between the early 1980s and the early 1990s, but this trend was reversed and the rate increased to 10 percent by end-2002. This paper provides an analytical framework to explain this development. The growth of higher-skilled sectors coupled with rigidities in the labor market seem to account for the observed unemployment behavior. Policy makers can improve employment prospects by not only investing in education to reduce skills mismatch but also by reforming the pay-setting institutions.

Subject: Labor, Labor force, Labor market institutions, Skilled labor, Unemployment, Wages

Keywords: Determination system, Europe, High-learning-cost worker, Institutions, Labor demand gap, Labor force, Labor market, Labor market institutions, Mauritian unemployment puzzle, Production function, Skill premium, Skilled labor, Skill-learning worker, Unemployment, Unemployment problem, Unemployment rate, Unskilled worker, Wage, Wage differential, Wage inequality, Wage-bargaining system, Wages, Workers life, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/211
Stock No:

WPIEA2112003
ISBN:

9781451874860
ISSN:

1018-5941

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