This paper reviews the experience of Armenia with the displacement of more than 7,000
teachers during 2003–07 as part of structural reforms in general education. In addition to
supplementary severance payments, a variety of services were needed to address
difficulties commonly experienced by displaced employees, including job search
assistance and counseling services, provision of information on the labor market, on legal
rights of job seekers, on services and service providers available, including training,
relocation assistance, and so forth. The findings of the paper suggest that the staff
rationalization program has resulted in significant efficiency gains: the student-teacher
ratio increased from 10.8 in 2003 to 13.9 in 2006. The considerable reduction in staff
positions has allowed the government to significantly increase nominal wages and
salaries for teaching and non-teaching staff.