By Susan Horton, S. M. Ravi Kanbur, Dipak Mazumdar

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Earnings functions can be helpful in this regard. How can we interpret the evidence discussed above, and what can we infer about labor market workings? As discussed earlier, there are three possible explanations as to why unemployment may persist during stabilization. The first is that the labor market is not working well because of real wage rigidity. The evidence presented by the case studies certainly does not favor the view that real wages were rigid, and therefore led to unemployment. Even for Chile, where unemployment Page 20 was highest and persisted the longest, real wages fell dramatically.

Egypt: population census. Korea: Bank of Korea, Principal Economic Indicators. Malaysia: Wong (1985) for the 1970s; Fifth Malaysia Plan 198690 for 1980; World Bank economic reports for 198189. Thailand: Statistical Yearbook (various years). a. a. 10610311410911010610096 85 848178838081Korea, Rep. a. a. b. c. d. e. f. g. Sources: Argentina, Bolivia, Chile, Costa Rica, Egypt, Ghana, Kenya: country studies. Brazil: Riveros (1989). Côte d'Ivoire: Lavy and Newman (1989). Korea: Bank of Korea, Principal Economic Indicators.

The two other Sub-Saharan African studies rely on cross-sectional data for the 1980s from the World Bank Living Standards Surveys. Data from these surveys have the advantage of covering rural areas, and with some ingenuity (for example, using information on length of tenure in current job or length of residence in current location) can be used to shed light on some changes that have occurred in the labor market over time. In addition to labor force surveys, many countries have other data from employment and earnings surveys, collected usually at the establishment level.

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