Making Work Pay in Nicaragua : Employment, Growth, and Poverty Reduction

by Gutierrez, Catalina; Paci, Pierella; Ranzani, Marco

• ISBN13: 9780821375341
• ISBN10: 0821375342
• Format: Paperback
• Copyright: 2008-06-15
• Publisher: World Bank

Summary

Poor people derive most of their income from work. However, there is insufficient understanding of the role of employment and earnings as a link between growth and poverty reduction, especially in low income countries. The 'Making Work Pay' series analyzes the important roles of labor markets, employment, productivity, and labor income in facilitating shared growth and promoting poverty reduction.'Making Work Pay in Nicaragua' provides a description of the trends in growth, poverty, and labor market outcomes in Nicaragua. It assesses the linkages among changes in output, employment, and labor productivity, and it links changes in the quality and quantity of employment to poverty reduction. The book also addresses other key issues, such as rural versus urban conditions, women and children in the labor market, and self-employment and household enterprises, and it identifies priorities for further analysis and policy intervention.'Making Work Pay in Nicaragua' will be of interest to development practitioners in international organizations, governments, research institutions, and universities with an interest in inclusive growth and the creation of productive employment.

Table of Contents

Acronyms and Abbreviations	p. xi
Acknowledgments	p. xiii
Introduction and Overview	p. 1
Objectives and Scope of this Task	p. 2
Structure of the Report	p. 3
Country Context	p. 7
Macroeconomic Context	p. 7
Labor Market Context	p. 10
Labor Regulation in Nicaragua	p. 20
Output, Population, Employment, and Poverty	p. 27
Main Trends in Output	p. 27
Main Trends in Population	p. 28
Main Trends in Employment	p. 30
Main Trends in Poverty	p. 31
Decomposition of Per Capita Income Growth	p. 32
A Closer Look at the Manufacturing Sector	p. 42
Decomposition of Per Capita Value Added Growth	p. 48
Employment and Labor Income Profile of the Population	p. 59
Income and Employment Profile	p. 60
Decomposition of Changes in Labor Income	p. 63
A Closer Look at Agriculture	p. 69
Decomposition of Labor Income Growth	p. 78
Estimation Results	p. 81
Segmentation and Skill Mismatch	p. 87
Labor Market Segmentation: Basic Assumptions and Literature Review	p. 87
Evidence of Segmentation across Different Dimensions	p. 90
Segmentation and Barriers to Mobility: A Qualitative Approach	p. 103
Skill Mismatch	p. 107
Policy Implications and Further Research	p. 115
References	p. 119
Index	p. 125
Figures
Investment, Exports, and Growth, 1995-2005	p. 9
Distribution of Wages by Sector and Formality, 2001	p. 24
Change in Population Structure, 2001-05	p. 29
Share of Employment by Sectors, 2001 and 2005	p. 31
Aggregate Employment and Productivity Profile of Growth, 2001-05	p. 35
Decomposition of Changes in Output per Worker, 2001-05	p. 37
Growth in Average Per Capita Income, by Quintile, 2001	p. 68
Productivity of Sensitive Products by Yield per Hectare, 1990-2005	p. 71
Relative Productivity by Product, 1990-2005	p. 72
Area Harvested for Sensitive Products, 1990-2005	p. 73
Production Volume for Sensitive Products, 1990-2005	p. 74
Producer Prices Relative to Consumer Prices for Export Goods, 1999-2006	p. 75
Relative Prices of Trade for Meat, 1999-2006	p. 75
Relative Prices for Cereals, 1999-2006	p. 76
Relative Prices for Sensitive Products, 2001-06	p. 76
Hourly Earnings by Employment Category, 2001	p. 93
Hourly Earnings by Broad Sector and Informality, 2001	p. 94
Changes in the Skill Premium and the Relative Supply of Skills, of Total Wage Workers, 2001-05	p. 109
Changes in the Skill Premium and the Relative Supply of Skills, of Urban Wage Workers, 2001-05	p. 110
Tables
Main Macroeconomic Indicators, 1998-2005	p. 11
Main Indicators of the Labor Market, 2001 and 2005	p. 13
Earnings and Income by Employment Category, 2001 and 2005	p. 14
Hierarchical Description of the Population Six Years of Age and Above, 2001 and 2005	p. 16
Other Characteristics of the Employed, 2001 and 2005	p. 18
Labor Market Flexibility, Comparative Performance	p. 21
Issues Affecting the Investment Climate	p. 22
Minimum Wage and Lowest Wage Paid as a Proportion of Minimum Wage, 2001 and 2005	p. 23
Sectoral Growth, 1998-2005	p. 28
Average Level of Education of Population Ages 25 to 64	p. 30
Evolution of Employment by Sectors, 2001 and 2005	p. 32
Headcount Poverty Rates of the Working-Age Population by Employment Status, 2001-05	p. 33
Employment by Sector and Poverty Level, Shares of Total Employment, 2001 and 2005	p. 34
Percentage Change in Selected Variables, 2001-05	p. 35
Decomposition of Intersectoral Shifts	p. 39
Sectoral Growth, 2001-05	p. 39
Employment Shares and Productivity, by Sectors of Economic Activity, 2001-05	p. 40
Total Sectoral Contribution to Growth, 2001-05	p. 41
Wages by Sector of Economic Activity, 2001 and 2005	p. 42
Employment Generation by Subsector, 2001 and 2005	p. 43
Wages in the Manufacturing Sector, 2001 and 2005	p. 44
Employment Generation in Manufacturing by Type of Employment, 2001 and 2005	p. 44
Employment Status of the Working-Age Population by Quintile, 2001 and 2005	p. 61
Employment Status of the Working-Age Population by Poverty Level, 2001 and 2005	p. 61
Employment Categories by Quintile, 2001 and 2005	p. 62
Employment Categories by Poverty Level, 2001 and 2005	p. 62
Structure of Income by Quintile, 2001 and 2005	p. 64
Structure of Income by Poverty Level, 2001 and 2005	p. 64
Labor Profile of the Population by Poverty Level, 2001 and 2005	p. 65
Labor Profile of the Population by Quintile, 2001 and 2005	p. 67
Per Capita Household Income Changes, by Quintile, 2001-05	p. 68
Shapley Decomposition of Per Capita Labor Income, by Quintile	p. 70
Number of Farms, by Sensitive Product, according to Farm Size, 2001	p. 71
Mean and Standard Deviation, by Employment Category	p. 81
Mean and Standard Deviation, by Sector of Economic Activity and Formality Level	p. 82
Earnings Equations by Employment Category, 2001	p. 83
Earnings Equations by Sector of Employment, 2001	p. 84
Oaxaca-Blinder Decomposition: Detailed Outcomes for Sector and Informality	p. 85
Oaxaca-Blinder Decomposition: Detailed Outcomes for Employment Categories	p. 86
Selection among Employment Categories, 2001	p. 97
Selection among Sectors, 2001	p. 98
Oaxaca-Blinder Decomposition by Employment Category	p. 100
Oaxaca-Blinder Decomposition by Employment Sector	p. 101
Reason for Starting a Business, by Level of Education, 2001	p. 104
Reason for Starting a Business, by Poverty Level, 2001	p. 105
Skills and Education of Available Workers as an Obstacle to Firms' Operation and Growth, 2003	p. 112
Boxes
Definitions	p. 4
Urban versus Rural Population: Possible Data Problems	p. 19
Evolution of the Maquila Sector and Its Importance in the Employment Growth in Manufacturing	p. 45
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