This overview of a symposium on labor markets and adjustment concludes that: (1) real wages are more flexible than generally supposed, (2) labor reallocations across sectors have been more or less in the desired direction, and (3) the role of labor unions, generally supposed to be an impediment to adjustment, is more subtle than generally supposed.

This paper examines the role of the labor market in the transmission process of adjustment policies in developing countries. It begins by reviewing the recent evidence regarding the functioning of these markets. It then studies the implications of wage inertia, nominal contracts, labor market segmentation, and impediments to labor mobility for stabilization policies. The effect of labor market reforms on economic flexibility and the channels through which labor market imperfections alter the effects of structural adjustment measures are discussed next. The last part of the paper identifies a variety of issues that may require further investigation, such as the link between changes in relative wages and the distributional effects of adjustment policies.

World Bank Discussion Paper 245. Experience shows that literacy levels are much more easily raised in children than in adults. Literacy is not easily transmitted to adults, and skills of neoliterates are not stable--a problem which can lower the effectiveness rate of literacy projects to as little as 12 or 15 percent. The World Bank now rarely funds these projects, but it is seeking a new strategy for meeting the challenges presented by adult literacy. To find causes for the low effectiveness of programs, a Bank team conducted two literature reviews on literacy in general and on the cognitive correlations of age and performance. The editor presents their findings, pointing to the major obstacles to and determinants of adult literacy, and suggests effective instructional methods. The team also emphasizes the need for more research on the subject.

This overview of a symposium on labor markets and adjustment concludes that: (1) real wages are more flexible than generally supposed, (2) labor reallocations across sectors have been more or less in the desired direction, and (3) the role of labor unions, generally supposed to be an impediment to adjustment, is more subtle than generally supposed.