Designing Labor Market Institutions in Emerging Market and Developing Economies: A Review of Evidence and IMF Policy Advice
This paper reviews the state of theory and evidence on the design of labor market institutions in emerging markets and developing economies
Abstract
This paper reviews the state of theory and evidence on the design of labor market institutions in emerging markets and developing economies. Compared with advanced economies, these economies tend to have larger market failures, which creates a strong case for government intervention. But they also face larger risks of policy failures due to informality and limited administrative capacity. We draw specific implications from this tension for the design unemployment insurance, job protection legislation, minimum wages and wage bargaining systems. We then use text mining techniques to identify and review a decade of IMF recommendations in these areas for 30 emerging market and developing economies
This work is part of the ‘Macroeconomics in Low-income countries’ programme.
Citation
Romain A Duval and Prakash Loungani (2019) Designing Labor Market Institutions in Emerging and Developing Economies: Evidence and Policy Options. IMF Staff Discussion Notes No. 2019/004