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Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius
Author: International Monetary Fund
Series:
IMF Working Papers
Volume/Issue:
Volume 2004: Issue 205
Language:
English
Publication Date:
01 Nov 2004
DOI:
https://doi.org/10.5089/9781451874587.001
ISBN:
9781451874587
ISSN:
1018-5941
Pages:
21
Keywords:
WP; job creation; Unemployment; Labor Market Restrictions; Wage Compression; quality firm-worker match; low-skill worker; determination process; worker redeployment; wage distribution; dislocation cost; equilibrium wage function; Labor markets; Wages; Job destruction; Western Europe
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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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Governments often intervene in labor markets with the aim of reducing inequality and promoting employment. Such intervention often results in wage compression and restrictions on how firms use their workers. This paper investigates the impact of such interventions on the labor market conditions faced by low-skill workers in Mauritius. It finds that even relatively minor intervention can dramatically increase the fragility of jobs, the length of unemployment spells, as well as the extent of unemployment and labor market churning. With institutions of the type studied here common across many different types of countries, these results have relatively general implications.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund