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Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius

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  • International Monetary Fund

Abstract

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.

Suggested Citation

  • International Monetary Fund, 2004. "Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius," IMF Working Papers 2004/205, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/205
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    References listed on IDEAS

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    Cited by:

    1. International Monetary Fund, 2005. "Inflation Targeting Lite' in Small Open Economies: The Case of Mauritius," IMF Working Papers 2005/172, International Monetary Fund.
    2. 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.

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