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Labor market policy in developing countries : a selective review of the literature and needs for the future

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  • Fields, Gary S.

Abstract

This paper presents a selective overview of the literature on modeling labor market policies in developing countries. It considers welfare economics, theoretical models, and empirical evidence to highlight the three general features needed in future research on labor market policy in developing countries. The author identifies desirable research components (welfare economics, theoretical modeling, and empirical modeling) and pitfalls in the literature (inappropriate use of productivity, reliance on wrong kinds of empirical studies, lack of cost-benefit analysis, attention to only a subset of the goods and bads, and fallacy of composition). The paper concludes with suggested topics and methods for future research. The author states that sound labor market policy requires sound labor market models. The paper makes a case for developing policy based on explicit evaluation criteria, specific theoretical models, and comprehensive empirical evidence.

Suggested Citation

  • Fields, Gary S., 2007. "Labor market policy in developing countries : a selective review of the literature and needs for the future," Policy Research Working Paper Series 4362, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4362
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    Citations

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    Cited by:

    1. Olivier Bargain & Prudence Kwenda, 2014. "The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 63(1), pages 117-153.
    2. Matias Busso & Maria Victoria Fazio & Santiago Levy Algazi, 2012. "(In)Formal and (Un)Productive: The Productivity Costs of Excessive Informality in Mexico," Research Department Publications 4789, Inter-American Development Bank, Research Department.
    3. Fields, Gary & Song, Yang, 2020. "Modeling migration barriers in a two-sector framework: A welfare analysis of the hukou reform in China," Economic Modelling, Elsevier, vol. 84(C), pages 293-301.
    4. Boggio, Luciano, 2009. "Long-run effects of low-wage countries' growing competitiveness and exports of manufactures," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 38-49, March.
    5. Marouani, Mohamed A. & Robalino, David A., 2008. "Assessing interactions among education, social insurance, and labor market policies in a general equilibrium framework: an application to Morocco," Policy Research Working Paper Series 4681, The World Bank.
    6. Fields, Gary S. & Song, Yang, 2013. "A Theoretical Model of the Chinese Labor Market," IZA Discussion Papers 7278, Institute of Labor Economics (IZA).
    7. Meir Russ, 2017. "The Trifurcation of the Labor Markets in the Networked, Knowledge-Driven, Global Economy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(2), pages 672-703, June.
    8. World Bank, 2020. "Nepal Development Update, July 2020," World Bank Publications - Reports 34178, The World Bank Group.
    9. Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute of Labor Economics (IZA).
    10. Abiodun O. Folawewo, 2016. "Institutions, regulatory framework and labour market outcomes in Nigeria," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 18(1), pages 67-84, October.
    11. Bargain, Olivier & Magejo, Prudence, 2010. "Is Informality Bad? Evidence from Brazil, Mexico and South Africa," IZA Discussion Papers 4711, Institute of Labor Economics (IZA).
    12. Mohamed A. Marouani & David A. Robalino, 2012. "Assessing interactions among education, social insurance and labour market policies in Morocco," Applied Economics, Taylor & Francis Journals, vol. 44(24), pages 3149-3167, August.
    13. Araujo, Luis Fernando Oliveira de & Ponczek, Vladimir Pinheiro, 2012. "Informal wages in an economy with active labor courts," Textos para discussão 294, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    14. Zubović, Jovan & Simeunović, Ivana, 2012. "On the New Methodology of Cost‐Benefit Analysis of ALMP – The Case of Serbia," MPRA Paper 42532, University Library of Munich, Germany.
    15. Rana Hasan & Karl Robert L. Jandoc, 2008. "The quality of jobs in the Philippines : Comparing self-employment with wage employment," UP School of Economics Discussion Papers 200811, University of the Philippines School of Economics.
    16. World Bank Group, 2014. "Balancing Flexibility and Worker Protection," World Bank Publications - Reports 23024, The World Bank Group.
    17. Jovan, Zubovic & Jonel, Subic, 2011. "Reviewing development of active labour market policies and the evaluation techniques," MPRA Paper 35282, University Library of Munich, Germany, revised 17 Oct 2011.
    18. Rajesh Raj Natarajan & Simone Schotte & Kunal Sen, 2020. "Transitions between informal and formal jobs in India: Patterns, correlates, and consequences," WIDER Working Paper Series wp-2020-101, World Institute for Development Economic Research (UNU-WIDER).
    19. Luis Araujo & Vladimir Ponczek, 2009. "Modeling Labor Market Segmentation," Working Papers 09_04, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.

    More about this item

    Keywords

    Labor Markets; Labor Policies; Markets and Market Access; Population Policies;
    All these keywords.

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