2. Labor Markets in Developing and Transition Countries

The present chapter provides a detailed account of the labor market characteristics from developing and transition countries, with special emphasis on a number of current policies that have been adopted in India. One such policy, that this chapter models and discusses in considerable detail, is the employment guarantee scheme, which appears to be the largest of any such programs ever implemented. The characteristics of the labor market discussed with relevance to the employment guarantee scheme stand largely outside the formal industrial environment in India. The thin organized sector in India, and other countries with similar economic potentials and aspirations, also received adequate emphasis in view of the standard labor market reforms adopted over the last two decades. In light of this, we have reviewed important analytical structures that create the interface between organized labor force and the industrial reorganization. Issues like the labor laws prevailing in India, its implications for economic activities, in general, and the evolution of both organized and unorganized sectors, in particular, have been discussed. This chapter sets the tone for discussions on specific issues in the following chapters.