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Discusses the interaction of structural adjustment policies with wages and employment worldwide, examining the examples of Chile and Indonesia during recent periods of policy reform. As the macroeconomic policies chosen to assist adjustment are often diverse, policy errors can be made while more 'employment-friendly' policies are available. Greater attention to employment outcomes can thus affect policy selection and sequencing. Social dialogue is clearly an essential element of employment policy, and the best route to achieving compatibility between economic reality and maximization of labour welfare and productivity.
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