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Adjustment Policies, Poverty, and Unemployment: The IMMPA by Pierre-Richard Agenor, Alejandro Izquierdo, Henning Tarp

By Pierre-Richard Agenor, Alejandro Izquierdo, Henning Tarp Jensen

Pierre-Richard Agenor's pioneering paintings on built-in Macroeconomics versions for Poverty research (IMMPA) is cataloged for the 1st time during this must-read volume.A type of dynamic computable normal equilibrium versions, IMMPA types are designed to investigate the influence of adjustment guidelines on unemployment and poverty within the constructing global. together with either papers initially circulated in the course of the international financial institution, in addition to new fabric that locations this crucial paintings in its better context, Adjustment regulations, Poverty, and Unemployment information the historical past and makes use of of those versions to this point, in addition to pointing to destiny advancements for his or her usage.

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Botero et al. (2004) found that Latin America and the Caribbean is the region with the highest job security index in the world. The index that they compiled is a normalized sum of the following four dimensions of protection: a) whether employment at will is allowed and whether termination for economic reasons is considered a fair cause for dismissal; b) procedures that an employer must follow and approvals it must seek prior to individual or collective dismissals; c) advance notice and severance payments; and d ) whether job security is explicitly recognized in a country’s constitution.

Hirata and Humphrey (1991) found that skilled workers in Brazil, upon losing their job, are more likely than other labor categories to remain in open unemployment, rather than working in the informal sector. This is also the case in several other Latin American countries (see Inter-American Development Bank (2003)). Similarly, Banerjee and Bucci (1995) found that the open unemployment rate in India is higher among the educated. Hollister and Goldstein (1994), Said (2001), and the World Bank (2004) provide evidence of high levels of skilled unemployment in MENA; in several countries of the region, a large majority of individuals in open unemployment have secondary or postsecondary degrees.

Other studies, however, did not prove conclusive. In a study on Brazil, for instance, Paes de Barros and Corseuil (2001) found no evidence of a statistically significant effect of job security provisions on employment. Downes et al. (2003) found that labor market regulations in English-speaking Caribbean countries had only a limited impact on employment creation; output growth was the key factor. Thus, whether or not reducing firing costs would help to reduce unemployment by enhancing labor market flexibility (through increased worker turnover into and out of the pool of the unemployed), as advocated by some, is an open question.

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