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The Labor Market and Economic Adjustment
Author:
Pierre-Richard Agénor null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1995: Issue 125
Language:
English
Publication Date:
01 Nov 1995
DOI:
https://doi.org/10.5089/9781451854787.001
ISBN:
9781451854787
ISSN:
1018-5941
Pages:
98
Keywords:
WP; nominal wage; private sector; labor force; central government; efficiency consideration; informal economy; unemployment rate; wage formation; sector wage; market segmentation; structural adjustment; wage contract; leadership effect; excess demand; wage employment; inflation rate; wage ratio; Wages; Labor markets; Employment; Real wages; Minimum wages; Africa; Sub-Saharan Africa; Middle East; Western Hemisphere; Asia and Pacific
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the role of the labor market in the transmission process of adjustment policies in developing countries. It begins by reviewing the recent evidence regarding the functioning of these markets. It then studies the implications of wage inertia, nominal contracts, labor market segmentation, and impediments to labor mobility for stabilization policies. The effect of labor market reforms on economic flexibility and the channels through which labor market imperfections alter the effects of structural adjustment measures are discussed next. The last part of the paper identifies a variety of issues that may require further investigation, such as the link between changes in relative wages and the distributional effects of adjustment policies.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund