Kingdom of Lesotho: Selected Issues
IMF Staff Country Reports, July 20, 2023
Source details
- Canonical URL
- Kingdom of Lesotho: Selected Issues
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Bibliographic details
- Published: July 20, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400248665.002
Purpose and scope
- Focus: decomposing the public-private sector wage differential in Lesotho.
- Key angles: overview of public sector employment and compensation; estimation and exploration of drivers of the public sector wage premium; decomposition of the public-private wage gap.
Main findings
- Lesotho’s public wage bill is significantly higher than in other countries in the region.
- The public sector wage premium between public and private sectors is a central contributor to elevated public compensation costs.
- The upward inertia in the public wage bill has been gradually crowding out all other government spending.
- Containing the wage bill is essential to ensure fiscal sustainability and improve income distribution.
Analysis highlights
- The paper provides a detailed decomposition of the public-private wage gap, examining observable and unobservable drivers of the wage premium.
- Public sector employment and compensation are profiled to identify structural contributors to the high wage bill.
- The report emphasizes the fiscal trade-offs from persistent wage growth in the public sector and the resulting resource constraints for other government functions.
Policy recommendations
- Reduce and better manage public sector employment using a combination of:
- essential hiring,
- natural attrition,
- staff redeployment.
- Contain the public wage bill to restore fiscal space and improve income distribution.
Publication metadata (excerpt)
- Publication date: July 20, 2023
- Pages: 43
- Issue: 269
- Series: Country Report No. 2023/269
- DOI: https://doi.org/10.5089/9798400248665.002
- ISBN: 9798400248665
- ISSN: 1934-7685
Source: Kingdom of Lesotho: Selected Issues (IMF Staff Country Reports), July 20, 2023.
Content in this bundle
- Kingdom of Lesotho: Selected Issues; IMF Country Report No. 23/269; June 30, 2023