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World Development Report 1995:
Workers in an Integrating World

Published for the World Bank by Oxford University Press

1995. 264 pages. ISBN 0-19-521102-2

Stock # 61102. US$26.00

Explains how changes in the world economy are affecting the lives and expectations of workers around the world. Concludes that market-based development strategies are the best way of raising the living standards of workers, including the poorest.

"This year's World Development Report from the World Bank
takes on a question which ought to be at the
top of the international policy making agenda in years to come.

What is the best way to prepare workers for membership in a global labour market?"

- Financial Times, June 30, 1995

Read World Development Report 1995: Workers in an Integrating World. Executive Summary online in English, franšais, or espa˝ol.

Working in revolutionary times

Changes in the global economy...the embrace of market-based development by many developing and former centrally planned economies...the opening up of international markets...and advances in the ease with which goods, capital, and ideas flow around the world...are bringing new opportunities to billions of people. These changes are set to continue.

In 1978, about a third of the world's work force lived in countries with centrally planned economies; at least another third lived in countries weakly linked to international trade because of protective barriers. By the year 2000, fewer than 5 percent of workers are likely to find themselves in such circumstances.

The most prosperous group of workers in the world now earn on average 60 times more than the poorest group. The same ratio was dramatically higher 30 and 100 years ago. Wages and employment in a group of East Asian economies increased several-fold between 1970 and 1990. Meanwhile, they have stagnated in Sub-Saharan Africa and fallen sharply in countries such as Mexico and the Kyrgyz Republic that are undergoing drastic changes.

This eighteenth annual edition of World Development Report explains how changes in the world economy are affecting the lives and expectations of workers around the world. The Report covers factors that influence the labor supply, the demand for labor, and the functioning of labor markets.

It explores the relationships between international economic transactions and the interests of labor. Particular attention is given to the effects on labor markets of education, the role of women, and the special situation of economies in transition from socialism.

The Report focuses on four questions:

  1. Which development strategies are good for workers?
  2. Does growing international integration offer an opportunity or pose a threat to workers?
  3. What are the proper roles of domestic labor market policies and of unions in improving labor market outcomes: efficiency of markets, equity of incomes, job security, and workplace standards?
  4. How can transitions to the global market economy from central planning or closed markets take account of the needs of labor?

The Report assesses the consequences of domestic policies and international developments from the perspective of workers. It concludes that policies which rely heavily on markets, emphasize investing in all the people, and support family farms in agriculture are also good for workers. Increasing globalization helps to expand the opportunities for nations and, on average, helps workers in rich and poor countries alike. Governments have a special role to play in designing measures to reach these workers as reforms take hold and lead to new growth and employment patterns.

The Report also assesses the role for labor policy and trade unions in an increasingly market-driven and integrated world. It finds that there is an important role for public policy in defining basic standards, providing the framework for individual and collective labor contracts, and reducing income insecurity for workers; and that unions can contribute to sound development paths in the right economic and political environment. But labor policy must be designed to complement market conditions in rural and urban markets and informal and formal settings, and it must avoid protecting relatively privileged groups of workers at the expense of the poorest.

The outlook is promising, but not guaranteed

For the remainder of this decade and into the twenty-first century, the economic outlook for workers in both rich and poor countries is promising, but not guaranteed. The next few decades are likely to witness further moves toward open domestic markets and global integration, with potentially rapid growth in incomes for most workers in most countries.

Despite the risks ahead, those predicting crisis or calamity are sounding a false alarm. There is no looming international labor surplus--although the old problems of the persistently unemployed, underemployed, or dismally underpaid are still with us. And international transactions, whether hrough trade, capital, or labor migration, are not going to destroy the prospects of the unskilled in better-off countries--such workers will mostly gain, not lose.

Governments and workers are adjusting to a changing world, but the legacy of the past can make change difficult or frightening. Realization of a new world of work is fundamentally a question of sound choices--in the international and the domestic realm. The right choices involve using markets to create opportunities, taking care of those who are vulnerable or left out, and providing workers with the means to make their job choices, bargain over their working conditions, and decide how their children will be educated. Workers have a powerful interest in good policy--they have to live with the consequences.

The Report includes World Development Indicators 1995 -- 33 statistical tables providing instant access to the most comprehensive and current data available on social and economic development in more than 200 economies. Topics range from agricultural production to international trade.

Also Available
Additional Reports Give you Regional Perspectives on Labor Issues

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World Development Report 1995: Workers in an Integrating World

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