Creating

21
Hiring and firing
workers
Who is reforming?
What to reform?
Why reform?
Yasmine, a recent graduate from Burkina Faso’s University
of Ouagadougou, is looking for a job. She finished
at the top of her class and has good communication
skills and excellent references from her professors. Yasmine
is invited to interview with a large manufacturing
company. The interview goes well. But an older male
candidate gets the job. After several months of fruitlessly
searching for a job, Yasmine gives up and joins
a relative’s business. The business operates informally:
in a country of more than 12 million, only 50,000 are
employed in the formal private sector.
Yasmine’s plight can be explained by rigid employment
regulation. In Burkina Faso employers cannot
write term contracts unless the job is seasonal or requires
special skills. Women can work no more than 8
hours a day and until last year weekend work was not
allowed. With rigid regulation, common in developing
countries, employers choose conservatively. Some workers
benefit—mostly men with years of experience on the
job. But young, female and low-skilled workers often
lose out, denied job opportunities (figure 4.1).
Inflexible labor markets stifle new job creation and
push workers into the informal sector. Three-quarters
of informal workers are women. They receive no health
benefits, no support for their children, no sick leave and
no pensions. If abused by their employer, they have no
recourse to the courts, because the employment relationship
is not documented. Far from protecting the
vulnerable, rigid employment regulations exclude them
from the market.
Reforms in employment and social security regulation
aimed at increasing labor market flexibility have