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Reducing labor redundancy in state owned enterprises, Volume 1
Author:Svejnar, Jan; Terrell, Katherine; Country:Brazil; Sri Lanka; Ghana; Serbia; Mauritius; Chile;
Date Stored:2003/03/01Document Date:1991/10/31
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Banks & Banking Reform; Health Monitoring & Evaluation; Labor Management and Relations; Municipal Financial Management
Language:EnglishMajor Sector:(Historic)Social Protection
Region:Europe and Central Asia; South Asia; Africa; Latin America & CaribbeanReport Number:WPS792
Sub Sectors:(Historic)Labor markets and employmentCollection Title:Policy, Research, and External Affairs working papers ; no. WPS 792. Transport
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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