Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius
IMF Working Papers, November 1, 2004
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- Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius
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Bibliographic details
- Published: November 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451874587.001
Summary findings
- Governments often intervene in labor markets with the aim of reducing inequality and promoting employment; such intervention often results in wage compression and restrictions on how firms use their workers.
- This paper investigates the impact of such interventions on the labor market conditions faced by low-skill workers in Mauritius.
- It finds that even relatively minor intervention can dramatically increase:
- the fragility of jobs,
- the length of unemployment spells,
- the extent of unemployment and labor market churning.
- With institutions of the type studied here common across many different types of countries, these results have relatively general implications.
Subjects and keywords
- Subject: Job destruction, Labor, Labor markets, Unemployment, Wage compression, Wages
- Keywords: determination process, dislocation cost, equilibrium wage function, job creation, Job destruction, Labor Market Restrictions, Labor markets, low-skill worker, quality firm-worker match, Unemployment, Wage Compression, wage distribution, Wages, Western Europe, worker redeployment, WP
Key statistics and publication metadata
- Publication title: Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius
- Publication type: IMF Working Papers
- Date: November 1, 2004
- Pages: 21
- Volume: 2004
- Issue: 205
- Series: Working Paper No. 2004/205
- DOI: https://doi.org/10.5089/9781451874587.001
- Stock No: WPIEA2052004
- ISBN: 9781451874587
- ISSN: 1018-5941
- Preview citation (format: Chicago): International Monetary Fund. "Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius", IMF Working Papers 2004, 205 (2004), accessed 9/18/2026, https://doi.org/10.5089/9781451874587.001
Implications
- Labor market interventions that compress wages and restrict firm practices can substantially worsen outcomes for low-skill workers by increasing job fragility, unemployment duration, and labor market churn.
- Because the institutional features examined are common across many countries, the paper’s findings have relatively general implications for the design and evaluation of labor market policies.
Source: IMF Working Paper — "Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius" (Working Paper No. 2004/205).