Republic of Lebanon : Economic and Labor Force Impact of the Change in the Wage Structure of the Public Sector

Amid uncertain growth prospects and shrinking fiscal space, the government's initial decision to significantly increase public sector employees' salaries is raising significant challenges. While the cost of living increase aims to offset the erosion of real wages over time, the change in the structure of salary scales is not accompanied by a similar structural revision of tasks and efficiency of public sector employees. At the macro-economic level, the overall increase in wages would weaken the Lebanese economy through the return of unsustainable debt dynamics, pressures on the peg, lower economic growth, and increased unemployment. Introducing revenue measures will reduce these negative impacts but would lower resilience to shocks and impede the use of counter-cyclical fiscal policies. Reforming the pension system will further reduce the negative impact, but such reform cannot be separated from the need for strengthening social safety nets.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013-06
Subjects:	ACCOUNTING, AGGREGATE DEMAND, ASSET VALUE, BALANCE OF PAYMENTS, BENEFICIARIES, BENEFICIARY, BUDGET DEFICIT, CAPITAL FORMATION, CAPITAL GAIN, CAPITAL GAINS, CAPITAL GOODS, CAPITAL INCOME, CASH PAYMENT, COMMERCIAL TRANSACTIONS, COMPETITIVENESS, COMPLIANCE COSTS, CREDIBILITY, CURRENT ACCOUNT DEFICIT, DEBT, DEBT SERVICE, DEBT SERVICE RATIO, DECLINE IN INVESTMENT, DEFICIT FINANCING, DEFICITS, DEPENDENTS, DISBURSEMENTS, DOMESTIC ECONOMY, ECONOMIC GROWTH, ECONOMIC SECTORS, ELASTICITY, ELECTRICITY, EXPENDITURE, EXPORTERS, EXPORTS, EXTERNAL FINANCING, FACTORS OF PRODUCTION, FISCAL CONSOLIDATION, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL POLICIES, FIXED ASSETS, FIXED CAPITAL, FOREIGN CURRENCY, FOREIGN EXCHANGE, FOREIGN EXCHANGE RESERVES, FRAUD, GDP, GOVERNANCE ISSUES, GOVERNMENT DEFICIT, GROSS FIXED CAPITAL FORMATION, HOME OWNERSHIP, IMMOVABLE ASSET, INCOME, INFLATION, INSTRUMENT, INSURANCE, INTEREST RATE, INTEREST RATES, INTERNATIONAL RESERVES, INVESTMENT CLIMATE, INVESTMENT DECISION, JUDGES, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LOCAL GOVERNMENTS, LOTTERY, MACROECONOMIC STABILITY, MACROECONOMIC VULNERABILITIES, MARKET PRICE, MIDDLE-INCOME COUNTRIES, MONEY CREATION, MONEY GROWTH, MONEY SUPPLY, MUNICIPALITIES, NOMINAL INTEREST RATES, NOTARY, OUTPUT, PENALTIES, PENSION, PENSION CONTRIBUTION, PENSION CONTRIBUTIONS, PENSION REFORM, PENSION REFORMS, PENSION SYSTEM, PENSION SYSTEMS, PENSIONS, POLITICAL ECONOMY, PRIVATE INVESTMENT, PRIVATE INVESTMENTS, PRIVATE PENSION, PRIVATE SECTOR, PROPERTY TAX, PUBLIC, PUBLIC DEBT, PUBLIC EMPLOYMENT, PUBLIC FINANCES, PUBLIC PENSION, PUBLIC PENSIONS, PUBLIC SECTOR, PUBLIC SECTOR WAGES, PURCHASING POWER, REAL ESTATE, REAL EXCHANGE RATE, REAL GDP, RESERVE, RESERVES, RETURN, SAFETY NET, SAFETY NETS, SALARIES, SALARY, SAVINGS, SOCIAL PROTECTION, SOCIAL SAFETY NET, SOCIAL SAFETY NETS, TAX, TAX ON CAPITAL GAIN, TAX ON CAPITAL GAINS, TAX POLICY, TAX RATE, TAX REGIME, TAXATION, TRADE DEFICIT, TRANSACTION, UNDERLYING ASSET, UNEMPLOYMENT, UNEMPLOYMENT RATE,
Online Access:	http://documents.worldbank.org/curated/en/2013/06/18042908/lebanon-economic-labor-force-impact-change-wage-structure-public-sector https://hdl.handle.net/10986/16030
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