Labor Relations Commons^™

Lifetime Migration In Colombia: Tests Of The Expected Income Hypothesis, Gary S. Fields

Gary S Fields

[Excerpt] People migrate and areas gain or lose population for a variety of reasons: differences in potential earnings, in job availability, in schooling opportunities, in quality of life, proximity to friends and relatives, and so on. The economic model of migration holds that the central factor determining individual migration decisions is the perceived opportunity to attain higher economic status. Area populations are expected to change differentially according to the economic opportunities offered. In empirical research in developed countries, economic factors have been shown to underlie most migration decisions. In developing countries, where the economic situation of the populace is far …

Income-Generating Functions In A Low Income Country: Colombia, Gary S. Fields, T. Paul Schultz

Gary S Fields

Income generating functions are statistical tools used to explain income inequality and other economic outcomes and behavior. These functions are often associated with a strict human capital framework, but they need not be. Instead, they may be viewed as a reduced form equation summarizing the relationship between income and various personal and locational characteristics. Following this latter interpretation, we develop the regression and analysis of variance approaches to income generating functions and estimate them empirically using micro-economic data from one low income country, Colombia. Proceeding to increasingly parsimonious specifications of income generating functions, insights are gained into the structure of …

Employment, Income Distribution And Economic Growth In Seven Small Open Economies, Gary S. Fields

Gary S Fields

[Excerpt] Resurgent interest has been manifested among development economists in trickle-down, i.e., the view that the more rapid the rate of economic growth, the more rapid the improvement in employment and income distribution. Throughout this paper, the term ‘income distribution’ will refer to the location and dispersion of the pattern of incomes, i.e., to ‘absolute incomes and poverty’ and to ‘relative income inequality’. Empirical evidence supports trickle-down in some cases, but the evidence is contrary to trickle-down in others.

These data indicate:

1. A high rate of economic growth is neither necessary nor sufficient for inequality to decline.
2. A high rate …

Employment And Economic Growth In Costa Rica, Gary S. Fields

Gary S Fields

Costa Rica’s economic growth in the last 25 years has had favorable labor market and income distribution consequences. Overall, employment growth kept pace with labor force growth, the mix of jobs improved, real wages rose, and relative inequality and absolute poverty fell. But during the economic crisis of 1980-82, when real per capita income plummeted, labor market conditions deteriorated markedly: unemployment doubled, employment composition worsened, and real wages fell by 40%. Growth, labor market conditions, and income distribution have moved together.

Earnings Mobility In Times Of Growth And Decline: Argentina From 1996 To 2003, Gary S. Fields, María Laura Sánchez Puerta

Gary S Fields

In recent years, the economy of Argentina has experienced both rapid economic growth and severe economic decline. In this paper, we use a series of one-year long panels to study who gained the most in pesos when the economy grew and who lost the most in pesos when the economy contracted. Various considerations led us to expect that mobility would be divergent—that is, that the individuals who started with the highest initial earnings would enjoy the largest earnings gains in pesos. Contrary to expectations and for a wide range of specifications, mobility is found to be mostly convergent, sometimes neutral, …

The Employment Problem In Korea, Gary S. Fields

Gary S Fields

What Korea has is not an "unemployment problem" but rather an "employment problem." The employment problem includes continued high unemployment, but it goes well beyond it, also encompassing falling labor earnings, rising poverty and inequality, disproportionate impacts on disadvantaged groups, informalisation of employment, increased job insecurity, and consequent social strains. This paper documents Korea's employment problem, characterizes the problem as deficient aggregate demand rather than frictional or structural unemployment, examines in some detail three of the most important elements of the social safety net (the Employment Insurance System, the Livelihood Protection Program, and public works), and considers four major ways …

Segmented Labour Markets In South Africa, Gary S. Fields

Gary S Fields

[Excerpt] The textbook labour market model aggregates all workers, all employers and all sectors of the economy into a single labour market. In this single labour market, workers supply labour, employers demand labour and the rate of pay (termed wage for shorthand) is determined by the intersection of supply and demand. Segmented labour market analysis proceeds from a different starting point. Workers, employers and sectors are not aggregated together. Rather, two or more labour market segments are identified, the groupings reflecting fundamental differences in how labour supply, labour demand and wage-determination mechanisms operate in different segments. For example, in the …

Self-Employment And Poverty In Developing Countries, Gary S. Fields

Gary S Fields

A key way for the world’s poor—nearly half of humanity—to escape poverty is to earn more for their labor. Most of the world’s poor people are self-employed, but because there are few opportunities in most developing countries for them to earn enough to escape poverty, they are working hard but working poor. Two key policy planks in the fight against poverty should be: raising the returns to self-employment and creating more opportunities to move from self-employment into higher paying wage employment.

Challenges And Policy Lessons For The Growth-Employment-Poverty Nexus In Developing Countries, Gary S. Fields

Gary S Fields

Productivity growth and structural change are generally considered to be important determinants of economic growth. However recent research revealed that they do not necessarily lead to higher growth and employment rates. Recent studies, drawing on data from developing countries, showed that only the “right” kind of productivity growth resulted in higher employment rates. Enterprises in Africa and Latin America caught up in matters of technology; however, this process resulted in a substitution of employment by technology. The same is true for structural change; only the “right” kind of structural change caused more growth and employment. Whereas in Asia, labour shifted …

Are African Workers Getting Ahead In The New South Africa? Evidence From Kwazulu-Natal, 1993-1998, Paul L. Cichello, Gary S. Fields, Murray Leibbrandt

Gary S Fields

[Excerpt] In this paper, we use the KIDS panel data to answer three questions about the ‘progress’ of African workers in this one province in post-apartheid South Africa. First, how have African workers progressed as a group? Secondly, which African workers have progressed the most, and by how much have they progressed? Thirdly, to what extent is the progress made by workers driven by transitions between employment and unemployment, or between informal and formal sector employment? We reach the following major findings. First, African workers in KwaZulu-Natal had quite diverse experiences, but experienced positive progress on average. Second, those who …

Employment And Development In The Developing World: Taking Stock Of What Research Can Teach Us, Gary S. Fields

Gary S Fields

Productivity growth and structural change are generally considered to be important determinants of economic growth. However recent research revealed that they do not necessarily lead to higher growth and employment rates. Recent studies, drawing on data from developing countries, showed that only the “right” kind of productivity growth resulted in higher employment rates. Enterprises in Africa and Latin America caught up in matters of technology; however, this process resulted in a substitution of employment by technology. The same is true for structural change; only the “right” kind of structural change caused more growth and employment. Whereas in Asia, labour shifted …

Earnings Mobility, Inequality, And Economic Growth In Argentina, Mexico, And Venezuela, Gary S. Fields, Robert Duval-Hernandez, Samuel Freije, Maria Laura Sanchez Puerta

Gary S Fields

This paper examines changes in individual earnings during positive and negative growth periods in three Latin American economies: Argentina, Mexico, and Venezuela. We ask two major questions. First, do panel income changes favor the income recipients who started at the top of the income distribution (“divergent mobility”) or those who started at the bottom (“convergent mobility”)? And second, are the groups that are found to gain the most when the economy is growing those that are found to lose the most when the economy is contracting (“symmetry of mobility”) or is the pattern asymmetric in the sense that the same …

Falling Labor Income Inequality In Korea’S Economic Growth: Patterns And Underlying Causes, Gyeongjoon Yoo, Gary S. Fields

Gary S Fields

Over the last twenty-five years, the economy of the Republic of Korea achieved a remarkable growth rate of 7 percent per year in real per capita income, causing it to be labeled, justifiably, as a “miracle economy.” This exceptional economic growth has been accompanied by an even more exceptional fall in labor income inequality. Using a newly-developed methodology, we use data from Korea’s Occupational Wage Surveys to quantify the importance of various factors that have contributed to the fall in labor income inequality in Korea. We find the most important factors explaining the level of income inequality are job tenure, …

Decomposing Ldc Inequality, Gary S. Fields

Gary S Fields

[Excerpt] At the present time, there is great interest among development economists in the problem of economic inequality in less developed countries (LDCs). Studies of the determinants of inequality follow either of two general approaches. The more traditional approach is associated with names like Kuznets (1963), Chenery and associates (1960, 1968, 1975), Adelman and Morris (1973), Ahluwalia (1976) and Chiswick (1971). These studies share a common methodology, consisting basically of looking at a cross-section of countries, and (1) measuring the degree of inequality in each, (2) measuring other characteristics of each country (e.g., level of GNP, its rate of growth, …

Changing Labor Market Conditions And Economic Development In Hong Kong, The Republic Of Korea, Singapore, And Taiwan, China, Gary S. Fields

Gary S Fields

In the newly industrializing economies (NIEs) of Hong Kong, the Republic of Korea, Singapore, and Taiwan (China), the entire working population has benefited from labor market institutions. The East Asian NIEs attained and maintained generally full employment, improved their job mixes, raised real earnings, and lowered their rates of poverty. This article reaches two principal conclusions. First, labor market conditions continued to improve in all four economies in the 1980s at rates remarkably similar to their rates of aggregate economic growth. Second, labor market repression was not a major factor in the growth experiences of these economies in the 1980s. …

Higher Education And Income Distribution In A Less Developed Country, Gary S. Fields

Gary S Fields

[Excerpt] The primary purpose of this paper is to empirically test among both the intra- and the inter-generational version of these three hypotheses for higher (i.e. post-secondary) levels of education for one less developed country, Kenya. A secondary purpose is to investigate other economic aspects of spending on higher education, most notably the question of horizontal equity in school finance. Before proceeding, a methodological point is in order. There is no consensus in the public economics literature on what is a suitable criterion for assessing the equitability of a fiscal programme. At least three criteria may be distinguished (the terminology …

The Dynamics Of Poverty, Inequality And Economic Well-Being: African Economic Growth In Comparative Perspective, Gary S. Fields

Gary S Fields

Two hundred and fifty million Africans (about 45% of the population) are poor. In rural areas, where most Africans live, there is, alas, a 'poor majority'. Rural poverty rates range from 37% in Madagascar and 41% in Kenya to 88% in Zambia and 94% in Ghana (Table 1). It is hard to imagine an issue in development economics that is of greater importance to humankind than the effects of economic growth on poverty and economic well-being. Yet there is remarkably little consensus on this vitally important issue, as illustrated by the following two polar positions: New patterns of growth will …

Changes In Poverty And Inequality In Developing Countries, Gary S. Fields

Gary S Fields

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.

Income Distribution In Developing Economies: Conceptual, Data, And Policy Issues In Broad-Based Growth, Gary S. Fields

Gary S Fields

[Excerpt] The aim of economic development is to raise the standard of living of a country's people, especially its poor. Economic growth, particularly when broadly based, is a means to that end. 'Underdevelopment' can be defined as a state of severely constrained choices. When one is choosing from among an undesirable set of alternatives, the outcome will itself be undesirable. Standards of living will be low. If standards of living are to be improved, people must have a better set of alternatives from which to choose. 'Economic development' is the process by which the constraints on choices are relaxed. Based …

[Review Of The Book Bridging The Gap: Four Newly Industrialising Countries And The Changing International Division Of Labour], Gary S. Fields

Gary S Fields

[Excerpt] The central focus of this book is the labor force in the context of structural change. Its title, "Bridging the Gap," signifies a concern with drawing the NICs closer to the developed world. The author, a senior economist and staff member of the International Labour Organisation, argues that "the experience of these four NICs also holds lessons for OECD countries, as it deals with such now universal issues as the role of government in the promotion of new ventures; how new growth areas can be identified; how foreign investors are attracted; and what the costs and benefits of government …

[Review Of The Book The Four Little Dragons: The Spread Of Industrialization In East Asia], Gary S. Fields

Gary S Fields

[Excerpt] This slim and eminently readable volume presents the 1990 Edwin O. Reischauer lectures delivered by Ezra Vogel, the Henry Ford II Professor of Social Sciences at Harvard University and a leading scholar on Asia. In the first chapter Vogel establishes the context for the experiences of the "late late industrializes". Japan and "the Four Little Dragons" (Hong Kong, Korea, Singapore, and Taiwan). The next three chapters are devoted to the experiences of Taiwan, Korea, and Hong Kong and Singapore, respectively. The last chapter offers an explanation for the dragons' successes.

The Potential Role Of An Employment Guarantee Scheme In Korea's Social Safety Net, Gary S. Fields

Gary S Fields

[Excerpt] Beginning in November 1997, the Republic of Korea underwent a devastating economic crisis. Declining macroeconomic conditions brought about major labor market disruptions in 1998: a quadrupling of unemployment, a fall of 9% in real wages, informalization of the remaining jobs, increased job insecurity, and rising poverty and inequality. Disadvantaged groups suffered a disproportionate impact. The result was not only economic misery but also social pain: increased homelessness, rising crime, heightened school dropouts, an accelerating divorce rate, and an overwhelming sense of social malaise. 1999 marked a major turnaround for Korea. GDP grew by 10.7%, and real wages are growing …

Place-To-Place Migration In Colombia, Gary S. Fields

Gary S Fields

[Excerpt] This paper builds upon earlier work of mine which explored the determinants of population migration in Colombia. As before, the basic proposition is that areas' economic opportunities play a central role in determining the spatial allocation of the population. My earlier paper used published data from the 1973 Colombian Census of Population to establish that the rates of net lifetime migration into Colombia's 23 provinces (or, as they are known in Colombia, "departments") are associated with those areas' labor market conditions. The present paper uses unpublished data for 12 zones (six regions, rural and urban segments of each) to …

Growth And Distribution In The Market Economies Of East Asia, Gary S. Fields

Gary S Fields

This is a review and comparison of seven books dealing with income distribution and economic development focusing on the countries of East Asia. The books reviewed are: Irma Adelman and Sherman Robinson, Income Distribution Policy in Developing Countries. New York: Oxford University Press, 1979. Edward K. Y. Chen, Hyper-Growth in Asian Economies: A Comparative Study of Hong Kong, Japan, Korea, Singapore, and Taiwan. New York: Holmes & Meier, 1979. John C. H. Fei, Gustav Ranis, and Shirley W. Y. Kuo, Growth with Equity: The Taiwan Case. New York: Oxford University Press, 1980. Walter Galenson, ed., Economic Growth and Structural Change …

Regional Inequality And Other Sources Of Income Variation In Colombia, Gary S. Fields, T. Paul Schultz

Gary S Fields

[Excerpt] Regional inequality is of interest for a variety of reasons: planning development policies aimed at alleviating poverty and reducing personal inequality, gauging the degree of a country's labor market integration, understanding patterns of population movement in general and labor force migration in particular, predicting future urbanization, and characterizing the poor. Policymakers often aim development programs at particular target groups such as those living in certain regions of a country. In this paper we analyze the determinants of incomes and income inequality in one less developed country, Colombia, examining both personal and regional aspects. The results help clarify the potential …

Poverty Changes In Developing Countries, Gary S. Fields

Gary S Fields

[Excerpt] This chapter is concerned with measuring how the extent of poverty changes in a country over time. 'Poverty', as the term is used here, denotes the inability of an individual or a family to command sufficient resources to satisfy basic needs. The poverty line is a constant real amount below which people are said to be poor. The extent of poverty in a country is then based on variables such as the number who are poor and the extent of their resource shortfall. This chapter treats three topics: how poverty is defined, how much poverty there is, and how …

Industrialization And Employment In Hong Kong, Korea, Singapore, And Taiwan, Gary S. Fields

Gary S Fields

[Excerpt] What are the links between macroeconomic growth and microeconomic development objectives? The initial view held by many economists, especially Latin America specialists, was that the goals of growth, employment, and income distribution are mutually incompatible and that the pursuit of all these objectives at once is bound to be futile. But in the last few years, studies of the economies of the Asian Newly Industrializing Countries (NICs), Hong Kong, Korea, Singapore, and Taiwan—the so-called "Group of Four"—have emerged, and they point to very rapid aggregate growth and marked improvements in labor market conditions and in income distribution. This chapter …

Living Standards, Labor Markets And Human Resources In Taiwan, Gary S. Fields

Gary S Fields

[Excerpt] This paper has three general aims: to demonstrate that standards of living have continued to improve during Taiwan's recent economic growth, to analyze the causes of improvements in the 1980s and before, and to discuss some specific issues which are likely to arise and which will need to be resolved in the years ahead.

Trade Strategies And The Poor: Adjusting To New Realities, Gary S. Fields

Gary S Fields

[Excerpt] The major policy issue examined in this paper is that of a country's 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 …

Taiwan’S Changing Employment And Earnings Structure, Gary S. Fields

Gary S Fields

[Excerpt] In its determined pursuit of economic development throughout the latter part of the twentieth century, Taiwan consistently succeeded in achieving growth rates that were amongst the highest in the world; however, in tandem with such growth, a number of significant changes also took place in the island's labour market. This chapter begins by highlighting some of the most important of these aggregate changes, as follows: (i) the achievement, and subsequent maintenance of, essentially full employment; (ii) improvements in the overall mix of jobs, in particular, a steady reduction in the share of agricultural employment to total employment, a very …