17 at the end of the recession than at the beginning. employment.

This occurred in spite of a drop in modern sector Wages for retained workers in the public sector fell from 13 percent less than in the private sector in 1979 to 19 percent less in 1984; for new hires, the wage differential increased from 4 percent less in public firms to 16 percent less--even when firm and worker characteristics were accounted for. Thus, the public sector (parastatal) effort to reduce the wage bill affected new employees more than the already-employed (Levy and Newman 1989:104-109). Moreover, among workers who kept their jobs, 47 percent of the workers in the public firms in the survey'<sup>3</sup> experienced a drop in real wages, but only 43 percent of retained workers in the private sector experienced such a drop. Thus, wage restraint in the public sector appears to have been less than fully transferred to private firms.

A recent study from Uruguay shows a reversal of public-private pay differentials during the 1980s, (Geller, 1991). In 1981, with the base-100-December 1984, the real wage was 130 for the economy, on average; 135 for the public sector, and 126 for the private sector. After a severe drop in 1983-84, private wages more than recovered so that by 1988, the real wage was 121 for the whole economy, 111 in the public sector, and 13 in the private sector. Although the wages were the result of tripartite negotiations, and not marketdetermined, they nonetheless reflect increased constraints -- on and a real drop in -- public sec.or wages. In general, public sector employees in Latin America seem to have been paid less than private sector employees in the early-to-mid-1980s.'4 The relationship between the public, private and parastatal sectors is difficult to quantify. Generally, civil service pay is, lower than parastatal pay, which is lower than private sector pay, except that the public sector pays more at the lowest skill levels (Robinson 1991:314). Rough data for Africa for the early 1980s support this picture (Lindauev, Meesook, and Suebsaeng 1988:13). As a result of pay differentials and the drain on public sector skills and budgets,"<sup>5</sup> some countries like Nigeria, Sudan, and Zambia attempted in the late 1970s to legislate pay equality between the civil service and the parastatal sector. The result was usually even less openness and fairness in salary determination than before, as parastatals found ways to circumvent government restrictions. If such ways were not found, public enterprises were often unable to attract skilled workers, or lost them to the domestic or foreign private sector, thereby creating an additional hindrance to the productive efficiency of parastatals.

The minimum wae. employment, and skill formation. As in industrial countries, there is no firm consensus about the effect of minimum wages. Minimum wages have been far higher and far lower than reservation wages." But now real wage erosion has severely affected the minimum wage in many African countries so that it is far below GDP per capita. Thus, distortions that might have existed have also eroded. An unresolved question is whether minimum wage laws constrain the incomes of a significant number of unskilled workers, and therefore affect wages and employment (ILO 1990:22). Camargo (1988:67-68) found that