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The Impact of Structural Reforms on Wages and Employment: The Case of Formal versus Informal Workers in Bolivia

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Author Info
Julius Spatz

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Abstract

This paper seeks to contribute to the ongoing controversy on the distributional effects of structural reforms in developing countries. To this end, we set up a small-scale macroeconomic model of a dual economy to capture the transmission mechanisms through which the deregulation of product and factor markets, the liberalization of the trade and FDI regime, and the privatization of public companies impact on the distribution of employment and wages between the formal and the informal sector. We empirically test the implications of our theoretical model in a detailed case study on the structural reform process in Bolivia since 1985.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1186.

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Length: 45 pages
Date of creation: Oct 2003
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Handle: RePEc:kie:kieliw:1186

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Related research
Keywords: Structural Reforms; Informal Sector; Wages; Employment; Bolivia;

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Find related papers by JEL classification:
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Haskel, Jonathan & Sanchis, Amparo, 1995. "Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, Blackwell Publishing, vol. 43(3), pages 301-21, September. [Downloadable!] (restricted)
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  2. Eduardo Lora, 2001. "Structural reforms in Latin America: What has been reformed and how to measure it?," RES Working Papers 4287, Inter-American Development Bank, Research Department. [Downloadable!]
    Other versions:
  3. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  4. Nickell, S & Vainiomaki, J & Wadhwani, S, 1994. "Wages and Product Market Power," Economica, London School of Economics and Political Science, vol. 61(244), pages 457-73, November. [Downloadable!] (restricted)
  5. Garino, Gaia & Martin, Christopher, 2000. "Efficiency wages and union-firm bargaining," Economics Letters, Elsevier, vol. 69(2), pages 181-185, November. [Downloadable!] (restricted)
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  6. Olivier Blanchard & Francesco Giavazzi, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," NBER Working Papers 8120, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October. [Downloadable!] (restricted)
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  8. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March. [Downloadable!] (restricted)
  9. Haskel, Jonathan & Szymanski, Stefan, 1993. "Privatization, Liberalization, Wages and Employment: Theory and Evidence for the UK," Economica, London School of Economics and Political Science, vol. 60(238), pages 161-81, May. [Downloadable!] (restricted)
  10. Lawrence H. Summers, 1989. "Relative Wages, Efficiency Wages, and Keynesian Unemployment," NBER Working Papers 2590, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jann Lay & Rainer Thiele & Manfred Wiebelt, 2006. "Resource Booms, Inequality, and Poverty: The Case of Gas in Bolivia," Kiel Working Papers 1287, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  2. Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research. [Downloadable!]
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