The Decline of Traditional Sectors in Israel : The Role of the Exchange Rate and the Minimum Wage

This paper examines the role of exchange rate appreciation and the minimum wage in the relative decline of traditional sectors in Israel. It finds little evidence to indicate that real exchange rate appreciation is primarily responsible for this decline. Rather, the evidence indicates that slower pr...

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Main Author: Clifton, Eric V.
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1998, 1998
Series:IMF Working Papers; Working Paper
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:This paper examines the role of exchange rate appreciation and the minimum wage in the relative decline of traditional sectors in Israel. It finds little evidence to indicate that real exchange rate appreciation is primarily responsible for this decline. Rather, the evidence indicates that slower productivity growth in traditional sectors has led to relatively larger increases in unit labor costs compared with high-tech sectors. Although the links are only indicative, the evidence also suggests that the minimum wage has played a role in the relatively faster growth in unit labor costs
Physical Description:24 p.
ISBN:1451858159
9781451858150