Employment Policy in Developing Countries: A Survey of Issues and Evidence

This survey is concerned with three issues: the sectoral structure of the labor force; unemployment; and underemployment. This book provides a statistical overview of these three issues. Historical and cross-sectional comparisons are used to place in perspective the quantitative dimensions of the growth of population, labor force, sectoral employment, and the supply of educated labor. Recent trends in labor productivity, developments in real wages, and estimates of unemployment and underemployment are also reviewed. The operations of labor markets and the determination of wages are discussed, especially the operation of urban labor markets. Simple numerical exercises illustrate the quantitative significance of the elimination of institutionally induced distortions in the market for unskilled labor. The causes of educated unemployment are also examined. Selected policies affecting, respectively, labor demand and supply are reviewed. On the demand side three policies are considered: the promotion of manufacturing, the development of agriculture, and efforts to increase the efficiency of capital markets. On the supply side, population programs are obviously relevant; education policy is also considered because of the high rates of unemployment recorded for educated labor.