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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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  • Julius Spatz

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.

Suggested Citation

  • Julius Spatz, 2003. "The Impact of Structural Reforms on Wages and Employment: The Case of Formal versus Informal Workers in Bolivia," Kiel Working Papers 1186, Kiel Institute for the World Economy.
  • Handle: RePEc:kie:kieliw:1186
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    More about this item

    Keywords

    Structural Reforms; Informal Sector; Wages; Employment; Bolivia;
    All these keywords.

    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, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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