Ms. Magda E. Kandil, Mrs. Genevieve M Lindow, Mr. Mario Mansilla, Mr. Joel Chiedu Okwuokei, Jochen M. Schmittmann, Qiaoe Chen, Xin Li, Marika Santoro, and Solomon Stavis
The paper examines the determinants of employment growth, drawing on data available across a sample of Caribbean countries. To that end, the paper analyzes estimates of the employment-output elasticity and the response of employment growth to major sources of labor market determinants, in the long and short run. The main determinants of employment include government investment and private sector credit, while the major determinants of external performance are real effective exchange rate, the price of major exporting commodities, the number of tourists, and growth in major trading partners. The paper concludes with a menu of policy recommendations and structural reforms towards sustaining high employment growth and higher living standards in the Caribbean.
This paper quantifies the magnitude and nature of migration flows from the Caribbean and estimates their costs and benefits. The Caribbean countries have lost 10-40 percent of their labor force due to emigration to OECD member countries. The migration rates are particularly striking for the highskilled. Many countries have lost more than 70 percent of their labor force with more than 12 years of completed schooling-among the highest emigration rates in the world. The region is also the world's largest recipient of remittances as a percent of GDP. Remittances constituted about 13 percent of the region's GDP in 2002. Simple welfare calculations suggest that the losses due to high-skill migration (ceteris paribus) outweigh the official remittances to the Caribbean region. The results suggest that there is indeed some evidence for brain drain from the Caribbean.
This paper reviews economic developments in Jamaica since 1985. In the early 1990s, Jamaica carried out a number of important structural reforms that had a favorable effect on the public finances, resulting in overall public sector surpluses averaging 3 percent of GDP in FY1993–95. These steps included the elimination of general price subsidies and the decontrol of prices, the elimination of the import monopoly of the Jamaica Commodity Trading Corporation, and the institution of cost pass-through mechanisms for public enterprises.