[Review of the book \u3ci\u3eIncome Distribution in Less Developed Countries\u3c/i\u3e]

[Excerpt] This book by R. M. Sundrum, a professor at the Australian National University and former director of the World Bank, is a compilation of issues, ideas, and data on income distribution in less developed countries (LDCs). Each chapter or section has something meaningful to say, and for this reason the book bears careful study. However, no overarching theme or approach is apparent, so the reader is likely to come away with numerous small lessons about distribution and development but few larger conclusions

Labour Market Modelling and the Urban Informal Sector: Theory and Evidence

[Excerpt] The purpose of this paper is to assess the compatibility between theoretical models of the urban informal sector (UIS) and empirical evidence on the workings of that sector in the context of developing countries\u27 labour markets. My major point is that although the UIS is an excellent idea which has served us well in the 1970s and 1980s, we have need in the next round of research to refine our terminology and our models in light of empirical findings which have come to the fore in the interim. I would contend that what empirical researchers label the informal sector is best represented not as one sector nor as a continuum but as two qualitatively distinct sectors. Wage employment or self-employment in small-scale units may be better than or worse than employment in the formal sector. This is not a new point: diversity of earning opportunities and other job characteristics within the informal sector has long been noted — among other places, in the pathbreaking work of Hart (1973) and in the critiques of the informal sector concept by Bienefeld and Godfrey (1975), the ILO Sudan Report (1976), Standing (1977) and Sinclair (1978). But only recently has this view come to the fore: A third point in which agreement has been reached concerns the degree of heterogeneity within the informal sector. Contrary to the prevailing image of a decade and a half ago to the effect that the informal sector was of a homogeneous nature, it is clear today that there are different segments within this sector (Tokman, 1986, p. 13)

A Discussion of Social Protection and Private Insurance

[Excerpt] This is a thoughtful and thought-provoking paper, informative and interesting. I learned a lot from reading this and have already passed it on to others. In my comments, I would like to do four things: highlight the major points and the rationale for them, raise a few quibbles, put forth some additional issues, and propose a possible resolution of a dilemma raised in the paper. But let us first try to be clear about what we are talking about. Professor Pestieau characterizes social insurance as being mandatory, universal, and redistributive. I would define it slightly differently: “Social insurance is a state-run or state-mandated system that is mandatory and universal.” Must it be redistributive? I would say that it may or may not be ex ante in an expected value sense. But of course, social insurance will surely be redistributive ex post once losses are incurred

Poverty and Low Earnings in the Developing World

More than three billion people are poor by international standards, and essentially all are to be found in the low- and middle-income countries of Asia, Africa, and Latin America. The issues for understanding poverty in the developing world - among them, self-employment and household enterprises, agricultural work, casual employment, and informal work – differ from those in the developed world. Different policy issues predominate: stimulating economic growth, harnessing the energies of the private sector, increasing paid employment, and raising the returns to self-employment. This chapter details how the poorer half of the world’s people work and gives an overview of lessons from around the world on what has helped improve their earning opportunities. The chapter concludes with suggestions for future research

[Review of the book \u3ci\u3eStudies of Urban Labour Market Behaviour in Developing Areas\u3c/i\u3e]

[Excerpt] In the 1970s social scientists from all disciplines became aware that an understanding of how labor markets function is central to determining who benefits from economic growth. Only a few researchers concerned with the economic development of Asia, Africa, and Latin America, however, have examined labor markets in any serious way. Hence, a compendium entitled Studies of Urban Labour Market Behavior in Developing Areas is particularly welcome

Trade Strategies and the Poor: Adjusting to New Realities

[Excerpt] The major policy issue examined in this paper is that of a country\u27s choice of a trade strategy in the context of helping the poor. As the end of the 1980s approaches, developing countries face a much more difficult economic situation than that which they confronted at the end of the 1970s. The paper begins by reviewing these new realities and the need for adjusting to them. After mentioning some non-policies, I proceed to consider both successful and unsuccessful country experiences and draw lessons from them. One policy singled out for special attention is wage policy and its interaction with trade strategy. I then analyze the package of policies for outward-oriented, labor-intensive, broad-based growth in one country (Costa Rica) and the possibilities for policy redirection in others. The major findings appear in the conclusion

Changes in Poverty and Inequality in Developing Countries

This paper presents new data on poverty, inequality, and growth in those developing countries of the world for which the requisite statistics are available. Economic growth is found generally but not always to reduce poverty. Growth, however, is found to have very little to do with income inequality. Thus the economic laws linking the rate of growth and the distribution of benefits receive only very tenuous empirical support here

The Unemployment Effects of Minimum Wages

Analyses the effect of a minimum wage on unemployment. Using a model with covered and non‐covered sectors, comparative static analysis is performed with respect to the elasticity of demand for labour in the covered sector, the elasticity of the wage in the non‐covered sector with respect to the size of the non‐covered sector labour force, and the size of the minimum wage. It turns out, contrary to the existing literature, that for none of these parameters is the comparative static effect unidirectional

[Review of the book \u3ci\u3eJobs and Incomes in a Globalizing World\u3c/i\u3e]

[Excerpt] This is a timely book about the labour market effects of globalization – specifically, the effects of globalization on jobs, wages and incomes in industrialized and developing countries. Ajit Ghose defines globalization as “a process of integration of national markets into a global market.” Globalization, he writes, is of such great concern now because of a new development: trade between developed and developing countries in competing products

The Impact of Government Policies on Urban Employment in Small Economies

[Excerpt] Most of the policies intended to affect urban employment are not specifically employment policies nor are they specifically urban. Rather, the amount of urban employment, the composition of that employment, and the returns from it are determined by a whole host of policies. To review them all in a short paper is an impossible undertaking. The criterion by which I decided which policies to consider is policy-relevance, asking which set of policies is apt to have the largest impact on employment