LABOR-MARKET SEGMENTATION AND THE IMPLICATIONS FOR PUBLIC-SECTOR RETRENCHMENT PROGRAMS

Despite the importance placed on reducing public sector employment in sub-Saharan Africa, remarkably little is known about the labor market transition paths of departing public sector workers. This paper uses h ousehold survey data from Conakry, Guinea to establish evidence of lab or market segmentation between the wage and nonwage sectors, An empiri cal model of the unemployment durations experienced by departing publi c sector workers finds that transition paths vary significantly accord ing to personal characteristics that also affect the resulting earning s opportunities in segmented labor markets. Particularly, there is a m arked tendency of females to enter quickly the nonwage sector, relativ e to males, and a negative influence of severance payments on wage sec tor employment acceptance. (C) 1997 Academic Press.