IDEAS home Printed from
   My bibliography  Save this paper

Adjustment and the labor market


  • Fallon, Peter R.
  • Riveros, Luis A.


How has the labor market responded to changes in macroeconomic conditions and related government policies? And to what extent has government intervention affected the microeconomic functioning of the labor market. Geographical immobility of workers does not seem to hinder adjustment. Labor is increasingly deployed in nontradables and import competing sectors, however, and problems of mobility between tradables and nontradables are reported. In addition, shortages of skilled manpower are reported. There is little evidence of wage resistence where wage indexation is not institutionalized. Traditional methods of wage support have become less important in the past two decades. Where effective minimum wage policies exist, they have the expected distortionary effects. Wage differences between the public and private sectors, particularly in sub-Saharan Africa, have continued to widen, and the efficiency of the public sector has declined as a result. Job security regulations may be an obstacle to structural adjustment programs insofar as they hinder the release of labor from contracting sectors.

Suggested Citation

  • Fallon, Peter R. & Riveros, Luis A., 1989. "Adjustment and the labor market," Policy Research Working Paper Series 214, The World Bank.
  • Handle: RePEc:wbk:wbrwps:214

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
    2. Bruno, Michael, 1976. "The Two-Sector Open Economy and the Real Exchange Rate," American Economic Review, American Economic Association, vol. 66(4), pages 566-577, September.
    3. Martin Prachowny, 1981. "Macroeconomic Analysis for Small Open Economies," Working Papers 445, Queen's University, Department of Economics.
    4. Sebastian Edwards, 1990. "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries," NBER Working Papers 3497, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:ilo:ilowps:282251 is not listed on IDEAS
    2. Caballero, Ricardo J. & Hammour, Mohamad L., 1996. "On the ills of adjustment," Journal of Development Economics, Elsevier, vol. 51(1), pages 161-192, October.
    3. Horton, Susan & Kanbur, Ravi & Mazumdar, Dipak, 1991. "Labor markets in an era of adjustment : an overview," Policy Research Working Paper Series 694, The World Bank.
    4. Palle S. Andersen, 1991. "Labour market developments in developing countries," BIS Working Papers 16, Bank for International Settlements.
    5. Bell, Linda A., 1995. "The impact of minimum wages in Mexico and Colombia," Policy Research Working Paper Series 1514, The World Bank.
    6. Infante R., 1991. "Labour market adjustment in Latin America: an appraisal of the social effects in the 1980s," ILO Working Papers 992822513402676, International Labour Organization.
    7. Fiszbein, Ariel, 1992. "Do workers in the informal sector benefit from cuts in the minimum wage?," Policy Research Working Paper Series 826, The World Bank.
    8. repec:ilo:ilowps:297942 is not listed on IDEAS


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:214. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.