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Mauritius; Unemployment and the Role of Institutions

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  • James Y. Yao
  • Calvin A McDonald

Abstract

Despite strong economic growth, a "U"-curve unemployment phenomenon in Mauritius can be observed. Unemployment plunged from 21 percent to less than 4 percent between the early 1980s and the early 1990s, but this trend was reversed and the rate increased to 10 percent by end-2002. This paper provides an analytical framework to explain this development. The growth of higher-skilled sectors coupled with rigidities in the labor market seem to account for the observed unemployment behavior. Policy makers can improve employment prospects by not only investing in education to reduce skills mismatch but also by reforming the pay-setting institutions.

Suggested Citation

  • James Y. Yao & Calvin A McDonald, 2003. "Mauritius; Unemployment and the Role of Institutions," IMF Working Papers 03/211, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:03/211
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    References listed on IDEAS

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    1. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    4. Dowrick, Steve & Gemmell, Norman, 1991. "Industrialisation, Catching Up and Economic Growth: A Comparative Study across the World's Capitalist Economies," Economic Journal, Royal Economic Society, vol. 101(405), pages 263-275, March.
    5. International Monetary Fund, 2002. "Mauritius; Selected Issues and Statistical Appendix," IMF Staff Country Reports 02/144, International Monetary Fund.
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    Cited by:

    1. Katsiaryna Svirydzenka & Martin Petri, 2017. "Mauritius: The Drivers of Growth – Can the Past Be Extended?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(8), pages 54-83, October.
    2. Meltem Ucal & Alfred Albert Haug & Mehmet Hüseyin Bilgin, 2016. "Income inequality and FDI: evidence with Turkish data," Applied Economics, Taylor & Francis Journals, vol. 48(11), pages 1030-1045, March.
    3. Ucal, Meltem & Bilgin, Mehmet Huseyin, 2009. "Income Inequality and FDI in Turkey: FM-OLS (Phillips-Hansen) Estimation and ARDL Approach to Cointegration," MPRA Paper 48765, University Library of Munich, Germany.
    4. World Bank, 2010. "Mauritius - Enhancing and Sustaining Competitiveness : Policy Notes on Trade and Labor," World Bank Other Operational Studies 2987, The World Bank.
    5. AfDB AfDB, . "Africa Competitiveness Report 2009," Africa Competitiveness Report, African Development Bank, number 11 edited by Adeleke Oluwole Salami, July-Dece.

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