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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 17 items for :

  • Type: Journal Issue x
  • Wages, Compensation, and Labor Costs: Public Policy x
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Cover IMF Working Papers
Road to Industrialized Africa: Role of Efficient Factor Market in Firm Growth
Manabu Nose
After a decade of rapid growth, industrialization has lost ground with shrinking manufacturing sector and high informality in Sub-Saharan Africa (SSA). This paper explores how land market and labor regulations affect factor allocative efficiency and firm performance in SSA. Using pooled data on firm balance sheets for 40 countries in SSA, the results identify significant land and labor misallocations due to limited market allocation of land and inappropriate regulatory policies. Using variations in ethnic diversity and the intensity of regulatory actions to peer firms at subnational level as instrumental variables, local average treatment effects show large productivity gains from factor reallocations, especially for marginally productive firms. Panel data results for Nigerian firms confirm factor market inefficiency as a principal driver of declining productivity, while showing that the 2011 minimum wage reform increased firm size. The results imply that improving formal regulation is critical to support firm growth at the stage of weak legal capacity, while informal sector monitoring gets effective as legal capacity develops.
Keywords:
WP; allocative efficiency; minimum wage; firm size; factor market; Firm growth; misallocation; land market; labor regulations; allocation index; tax contribution; firm productivity; firm performance; productivity measure; panel datum; firm size distribution; dual economy; firm age; Minimum wages; Labor markets; Wages; Labor demand; Asia and Pacific; Africa; Southern Africa; Sub-Saharan Africa; policy effect; case study; A. aggregate level analysis; A. firm size
Cover IMF Working Papers
Italy: Quantifying the Benefits of a Comprehensive Reform Package
Michal Andrle
,
Mr. Alvar Kangur
, and
Mr. Mehdi Raissi
This paper seeks to quantify the net benefits of a comprehensive reform package aimed at addressing Italy’s inter-related challenges. Specifically, it simulates the growth and competitiveness effects of a package of fiscal, financial, wage bargaining, and other structural reforms. Credible implementation of such a package yields substantial mediumterm dividends at negligible near-term growth costs. Real GDP growth is estimated to be substantially higher over the medium term, while the real effective exchange rate depreciates notably.
Keywords:
WP; GDP; Italy; reform; real GDP; OECD estimate; growth; competitiveness; fiscal policy; wage bargaining; labor market reforms; product market reforms; banking sector; DSGE models; GIMF simulation; IMF's Global Integrated Monetary and Fiscal; competitiveness gain; NPL ratio; Structural reforms; Nonperforming loans; Total factor productivity; Global
Cover Regional Economic Issues, Central, Eastern, and Southeastern Europe
Regional Economic Issues, Central, Eastern, and Southeastern Europe
How to Get Back on the Fast Track
International Monetary Fund. European Dept.

Abstract

This paper discusses the robust growth that continues in most Central and Southeastern European economies as well as in Turkey. Accommodative macroeconomic policies, improving financial intermediation, and rising real wages have been behind the region’s mostly consumption-driven rebound, while private investment remained subdued. In the near-term, strong domestic demand is expected to continue supporting growth amid continued low or negative inflation. The Russian economy went through a sharp contraction last year amid plunging oil prices and sanctions. Other CIS countries were hurt by domestic political and financial woes, as well as by weak demand from Russia. In 2016, output contraction is projected to moderate to around 1½ percent from 4¼ percent in 2015 as the shocks that hit the CIS economies gradually reverberate less and activity stabilizes. In the baseline, a combination of supportive monetary policy and medium-term fiscal consolidation remains valid for many economies in the region.

Keywords:
REO; country; CIS economy; CESEE country; inflation; CESEE economy; investment rate; monetary policy autonomy; CESEE region; Total factor productivity; Productivity; Minimum wages; Income; Domestic savings; Europe; Central and Eastern Europe; Global; Baltics
Cover IMF Staff Country Reports
Turkey: Selected Issue
International Monetary Fund. European Dept.
This paper discusses key issues of Turkey’s economy including private savings in Turkey, increase in the minimum wage for 2016, and nonfinancial corporate sector debt in Turkey. Over the last decade and half, Turkey successfully stabilized its macro economy. In the aftermath of the 1999–2001 economic crises, Turkey pursued a highly successful policy of macroeconomic stabilization. At the same time, however, private sector saving rate decreased significantly, leading to a current account deficit. The minimum wage increased by 30 percent in January 2016, affecting about 8 million workers directly. Nonfinancial corporate sector debt has increased substantially in recent years, on the back of increased foreign currency leverage.
Keywords:
ISCR; CR; minimum wage; NFC FX; TFP growth; total factor productivity; saving rate; minimum wage increase; wage distribution; minimum wage policy; gross wage; NFC FX loan; trend labor force participation rate; Minimum wages; Private savings; Potential output; Production growth; Global; Central Asia
Cover IMF Staff Country Reports
Republic of Belarus: Selected Issues
International Monetary Fund. European Dept.
Republic of Belarus: Selected Issues
Keywords:
ISCR; CR; wage; wage target; wage growth; deficit; exchange rate
Cover IMF Staff Country Reports
Republic of Belarus: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper on Belarus examines wage setting, the role of wage targets, as well as wage dynamics, and the relationship with productivity. It finds that wage targets set by the government appear to be the key driver of rapid wage growth. Little regional and sectoral variation also suggests close adherence to official targets and a high degree of government control. Wage growth has outpaced productivity growth as the targets do not take productivity developments into account. In order to resolve these issues, in the short run, the authorities should aim for wage restraint to contain domestic demand and improve competitiveness. More generally, wage targets should be phased out to make way for more market-oriented wage-setting mechanisms. This should be complemented by deeper structural reform, dismantlement of the wider system of mandatory economic targets. wage targets should be eliminated as they restrict the flexibility to respond to market conditions. However, reform of wage setting will not be enough on its own and should be complemented by further structural measures to remove other distortions, such as direct and indirect subsidies to state-owned enterprises, which allow them to generate profit while at the same time maintaining excess employment.
Keywords:
ISCR; CR; wage; wage target; wage growth; deficit; exchange rate; first grade wage; rubel wage target; Belarus economy; debt liability; energy trade data; Wages; Current account deficits; Wage dynamics; Current account balance
Cover IMF Staff Country Reports
Hungary: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper assesses recent trends in Hungary’s potential growth and medium-term growth prospects. It analyzes to what extent the recent moderation of GDP growth reflects structural factors. The paper lays out some stylized facts about the Hungarian economy that could explain the growth slowdown observed in recent years. It provides estimates of potential growth using various methods, identifies the sources of the growth slowdown, and offers forecasts of potential growth over the medium-term under the baseline scenario. A model-based approach is also employed to estimate potential growth over the medium term under a reform scenario.
Keywords:
ISCR; CR; labor market; Hungary; minimum wage; wage; output gap; EMs equity; labor productivity; Fed announcement; investment activity; output growth; growth performance; medium term growth prospect; Labor markets; Employment; Potential output; Minimum wages; Global; Europe; Eastern Europe; Africa
Cover IMF Working Papers
Structural Reforms and Regional Convergence
Mr. Antonio Spilimbergo
and
Ms. Natasha X Che
Which structural reforms affect the speed the regional convergence within a country? We found that domestic financial development, trade/current account openness, better institutional infrastructure, and selected labor market reforms facilitate regional convergence. However, these reforms have mixed effects on the growth of regions closer to the country’s development frontier. We also document that regional income disparity and average income are inversely correlated across countries so that speeding up regional convergence increases national income. We also present a theoretical model to discuss these results.
Keywords:
WP; Structural reforms; regional convergence; economic growth; income inequality; frontier region; cross-region mobility; region j; growth rate; development frontier; EU sample; Euro area debt crisis; development level; GDP variable; part of the country; country frontier; capital intensity level; Labor taxes; Minimum wages; Productivity; Tax wedge; Global
Cover IMF Working Papers
Regional Wage Differentiation and Wage Bargaining Systems in the EU
Mr. Athanasios Vamvakidis
The theoretical literature has argued that a centralized wage bargaining system may result in low regional wage differentiation and high regional unemployment differentials. The empirical literature has found that centralized wage bargaining leads to lower wage inequality for different skills, industries and population groups, but has not investigated its impact on regional wage differentiation. Empirical evidence in this paper for EU regions for the period 1980-2000 suggests that countries with more coordinated wage bargaining systems have lower regional wage differentials, after controlling for regional productivity and unemployment differentials.
Keywords:
WP; country; wage differential; wage; Italy
Cover IMF Staff Country Reports
Belgium: Selected Issues
International Monetary Fund
This Selected Issues paper focuses on the fiscal challenge for Belgium in coping with population aging, including the sustainability of prevailing fiscal federalism arrangements across all levels of governments. The analysis demonstrates that the current strategy of upfront consolidation is likely to fall short of achieving sustainability. Further reductions in aging-related spending and growth and productivity-enhancing reforms beyond those assumed under the authorities’ strategy appear to be necessary. The paper also assesses whether the wage bargaining framework, a key labor market institution, is conducive to preserving external competitiveness and raising employment rates.
Keywords:
ISCR; CR; cost; Belgium; government; nominal wage; wage norm; fiscal policy recommendation; adjustment mechanism; government entity; indexation rule; policy objective; widening wage gap; Labor costs; Wages; Wage adjustments; Aging; Fiscal stance; Europe