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Mauritius: Unemployment and the Role of Institutions

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  • Mr. James Y. Yao
  • Mr. 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

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

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    4. 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.
    5. International Monetary Fund, 2002. "Mauritius: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2002/144, International Monetary Fund.
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    Cited by:

    1. Mourao, Paulo Reis, 2018. "What is China seeking from Africa? An analysis of the economic and political determinants of Chinese Outward Foreign Direct Investment based on Stochastic Frontier Models," China Economic Review, Elsevier, vol. 48(C), pages 258-268.
    2. Nazia Anjum & Zahid Perviz, 2016. "Effect of Trade Openness on Unemployment in Case of Labour and Capital Abundant Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(1), pages 44-58, March.
    3. World Bank, 2010. "Mauritius - Enhancing and Sustaining Competitiveness : Policy Notes on Trade and Labor," World Bank Publications - Reports 2987, The World Bank Group.
    4. 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.
    5. International Monetary Fund, 2004. "Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius," IMF Working Papers 2004/205, International Monetary Fund.
    6. 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.
    7. AfDB AfDB, . "Africa Competitiveness Report 2009," Africa Competitiveness Report, African Development Bank, number 11 edited by Adeleke Oluwole Salami.
    8. 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.
    9. Otobe, Naoko., 2008. "The impact of globalization and macroeconomic change on employment in Mauritius : what next in the post-MFA era?," ILO Working Papers 994132323402676, International Labour Organization.
    10. Roshini Brizmohun & Diana Alessandrini & Valentina Hartarska, 2021. "Gender wage gap in small islands: Effect of a policy framework in Mauritius," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2207-2229, November.

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