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Reducing labor redundancy in state owned enterprises, Volume 1
Author:Svejnar, Jan; Terrell, Katherine; Collection Title:Policy, Research, and External Affairs working papers ; no. WPS 792. Transport
Country:Brazil; Sri Lanka; Ghana; Serbia; Mauritius; Chile; Date Stored:2003/03/01
Document Date:1991/10/31Document Type:Policy Research Working Paper
SubTopics:Environmental Economics & Policies; Banks & Banking Reform; Health Monitoring & Evaluation; Labor Management and Relations; Municipal Financial ManagementLanguage:English
Major Sector:(Historic)Social ProtectionRegion:Europe and Central Asia; South Asia; Africa; Latin America & Caribbean
Report Number:WPS792Sub Sectors:(Historic)Labor markets and employment
Volume No:1  

Summary: This paper focuses on what determines labor redundancy in selected modes of transport (rails, ports, and buses) in six countries: Brazil, Chile, Ghana, Mauritius, Sri Lanka, and Yugoslavia. It also analyzes different approaches for solving the problem, and concludes that analysis of the labor redundancy problem in public transportation enterprises has been neglected because conceptually it is not a simple, easily identifiable phenomenon and because its treatment is often politically controversial, as it affects social welfare. Governments tend to approach the problem only when circumstances are extreme (budget stress or near-complete breakdown of the transport system). Solutions are then hammered out in a tense environment, with no longer-term vision of the optimal employment and pay practices. This paper also presents a framework for identifying labor redundancy within different countries whose social welfare functions vary in the relative weight given to efficiency and equity . Redundancy-reduction schemes can have a high rate of return and still be socially acceptable. But, cash flow problems may necessitate the assistance of international donor agencies. Attention must be paid to how this compensation is administered, as it can make a difference to the workers' welfare.

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