Labor Markets in Asia: Issues and Perspectives

725 Pages·2006·7.804 MB·English

by  Jesus Felipe, Rana Hasan (eds.)

Labor Markets in Asia
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Labor Markets in Asia
Issues and Perspectives
Edited by
Jesus Felipe
Asian Development Bank
and
Rana Hasan
Asian Development Bank
© Asian Development Bank 2006
Softcover reprint of the hardcover 1st edition 2006 978-0-230-00791-8
All rights reserved. No reproduction, copy or transmission of this
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this work in accordance with the Copyright, Designs and Patents Act 1988.
First published 2006 by
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A merchant may sell many things,
but a worker usually has only one job,
which supplies not only his livelihood
but often much of his sense of identity.
An unsold commodity is a nuisance,
an unemployed worker a tragedy.
—Paul Krugman
(The Accidental Theorist. Penguin Books)
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vii
Contents
Foreword xiii
PrefaceandAcknowledgments xix
Contributors xxiii
ListofTables xxiv
ListofFigures xxviii
ListofBoxes xxxii
ListofAppendixes xxxiv
AuthorIndex 675
SubjectIndex 684

Chapter1
Introduction:OverviewoftheVolume
JESUSFELIPEANDRANAHASAN ..............................................................................1
References....................................................................................................17
PartI LaborMarketIssues
Chapter2
LaborMarketOutcomesinAsia
JESUSFELIPEANDRANAHASAN ...........................................................................21
2.1 Labor Force............................................................................................21
2.2 Poverty ..................................................................................................31
2.3 Unemployment and Underemployment ................................................32
2.4 Urban Labor Markets and Dualism .......................................................41
2.5 Conclusion ............................................................................................49
Appendixes ..................................................................................................50
References....................................................................................................59
Chapter3
LaborMarketsinaGlobalizingWorld
JESUSFELIPEANDRANAHASAN ...........................................................................63
3.1 The Economic Context in which Labor Markets Operate ....................64
3.2 Functions of the Labor Market .............................................................68
viii
3.3 The Mainstream Argument for Labor Market Reforms .........................70
3.4 Keynesian and Marxian Theories of Unemployment.............................80
3.5 Labor Market Policies in Practice ..........................................................86
3.5.1 Overview of the International Experience ............................86
3.5.2 Labor Market Policies in Asia: An Overview.........................96
3.6 Growth, Productivity, Employment, and the Role of Technology .......110
3.7 Wage-Led Employment .......................................................................115
Appendixes ................................................................................................122
References .................................................................................................138
Chapter4
TheEmploymentIntensityofGrowth:
TrendsandMacroeconomicDeterminants
STEVENKAPSOS ...........................................................................................143
4.1 Introduction ........................................................................................143
4.2 Methodological Background and Data Used .......................................145
4.2.1 Calculating Country Employment Elasticities ....................145
4.2.2 Shortcomings of Employment Elasticities...........................148
4.2.3 Data Used ............................................................................149
4.3 World and Regional Trends in Employment Elasticities......................150
4.3.1 Previous Estimates...............................................................150
4.3.2 Global Results .....................................................................151
4.3.3 Developed Economies .........................................................154
4.3.4 Transition Economies .........................................................157
4.3.5 Asia and the Pacific .............................................................160
4.3.6 Latin America and the Caribbean .......................................163
4.3.7 Africa and the Middle East ..................................................165
4.4 Econometric Modeling of Employment Elasticities ............................168
4.4.1 Model Specification and Data Used ....................................169
4.4.2 Empirical Results ................................................................171
4.5 Concluding Remarks ...........................................................................175
Appendixes ................................................................................................178
References .................................................................................................199
PartII CountryStudies
Chapter5
LaborMarketsinIndia:IssuesandPerspectives
T.C.A. ANANT,R.HASAN, P. MOHAPATRA,R.NAGARAJ,ANDS.K.SASIKUMAR...205
5.1 Introduction ........................................................................................205
5.2 Indian Economic Policy and Economic Reforms ................................207
5.2.1 1950–1965 ..........................................................................207
5.2.2 1965–1980 ..........................................................................208
ix
5.2.3 1981–1991...........................................................................209
5.2.4 Economic Reforms of 1991..................................................209
5.3 The Labor Market in India: Structure and Key Features .....................211
5.3.1 Population, Labor Force, and Employment ........................213
5.3.2 Migration.............................................................................216
5.3.3 Poverty.................................................................................218
5.3.4 Unemployment and Underemployment..............................220
5.3.5 Wages...................................................................................223
5.3.6 Quality of Employment and Labor in the Organized
Sector...................................................................................227
5.3.7 Industrial Employment and Wages......................................234
5.4 Labor Laws in India..............................................................................239
5.4.1 Labor Legislation in Colonial India: A Brief Overview........240
5.4.2 Labor Laws Since Independence..........................................241
5.4.3 Trends in Industrial Relations and Industrial Conflict........249
5.4.4 Labor Laws and the Labor Market Rigidity Debate.............252
5.4.5 Policy Debate on Labor Market Reforms.............................262
5.5 Social Protection in India.....................................................................267
5.5.1 Social Security: Legislative Provisions and Coverage..........268
5.5.2 Active Labor Market Policies...............................................272
5.6 Skills, Education, and the Labor Market..............................................277
5.7 Concluding Remarks............................................................................282
Appendix ...................................................................................................285
References..................................................................................................296
Chapter6
LaborMarketsinIndonesia:KeyChallengesandPolicyIssues
GUNTURSUGIYARTO,MAYLINGOEY-GARDINER,ANDNINASAPTITRIASWATI .........301
6.1 Introduction.........................................................................................301
6.2 Recent Developments in the Indonesian Economy..............................303
6.2.1 Macroeconomy.....................................................................303
6.2.2 The Government’s Development Plan..................................304
6.3 Labor Market Policies..........................................................................306
6.3.1 Overview..............................................................................306
6.3.2 Decentralization...................................................................311
6.3.3 Industrial Relations and Labor Unions................................312
6.3.4 Minimum Wage and Severance Pay.....................................313
6.4 Labor Market Outcomes......................................................................319
6.4.1 Labor Force: Basic Characteristics.......................................319
6.4.2 Unemployment and Underemployment..............................333
6.4.3 Employment.........................................................................341
6.4.4 Wages...................................................................................352