29 14. See, for example, Lopez and Riveros (1989).

15. Lindauer et al. (1988:15) note that these are related issues. The government is disadvantaged vis a vis the state-owned sector in two ways. First, the state-owned sector receives financial resources and second, it uses these resources to attract skilled workers away from the civil service.

16. In Burkina Faso in the early 1980s for example, the minimum wage was more than 900 CFA per month, while the going rate for a laborer was about 150 CFA. In Thailand however, the first minimum wage (1973) was 12 baht/day, only about half of the going wage for unskilled non-agricultural labor (ILO).

17. See, for example, Lopez 1992 (forthcoming).

18. Salaries from the years 1985-88. They are usually average salaries, and do not differentiate between public and private wage rates.

19. For example, Nunberg (1988, 13) contends that nonpecuniary benefits offset the effects of wage compression and salary erosion, particularly in Africa, and are therefore important in influencing labor supply behavior. van der Gaag and Vijverberg (1988:251) find nonwage benefits probably important in influencing labor supply behavior in Cote d'Ivoire. Riveros (1991, 12n.) finds that although real wages have fallen in countries like Columbia and Venezuela, real labor costs have not changed due to the offsetting increases in nonwage compensation.

20. Assumptions included a housing allowance or imputed rent, incorporation of salary progression, and salaries net of taxes for both single people and heads of household.

21. The countries are Botswana, the Gambia, Kenya, Sierra Leone, and Zambia. The initial year is 1970, 1971 or 1972, and the most recent year varies from 1983 to 1987. Educational categories are unskilled, primary, middle secondary, higher secondary, and university graduate.

22. High nonwage labor costs are not necessarily distorting--the total may be market-clearing, and the balance may reflect the negotiated preferences of employers and employees. However, nonwage costs exogenously imposed by the government would be distorting. Thus, in a cross-country context, a high ratio of nonwage costs to per capita income, the opportunity cost of labor -- is an appropriate proxy for the level of formal sector labor market distortion in a country (Riveros, 17n.) 23. Hong Kong and Korea are countries in the study in which the minimum wage and job security respectively are quantitatively unimportant, and Nigeria exemplifies countries where laws on the books are largely unenforced.

24. For example, a doctor earns only 1.5 times more than a clerical worker in Sweden, and only twice as much in Australia, yielding standard deviations across all public sector occupations of only 18 and 29 respectively (Helier and Tait 1984:49).

25. The growth of the public sector as a response to economic crisis is documented in studies of Egypt, Malaysia, and all five Latin American countries studied by Horton and others (1991:43).

26. See for example, Nunberg and Nellis (1990:23), Riveros and others (1990:1).

27. The authors caution that both reviews are snapshots of countries in different stages of implementation, and that few of the programs are long standing.

28. Coldough cites Botswana, where two-thirds of rural households received some remittances from urban workers in 1977. However, Adams contends that the equity impacts may be negative in the case of Egypt because remittances are earned mostly by upper-income villagers (World Bank 1991:47).