A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa

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Tác giả: Hans Lofgren

Ngôn ngữ: eng

Ký hiệu phân loại: 581.96 Specific topics in natural history of plants

Thông tin xuất bản: World Bank, Washington, DC, 2017

Mô tả vật lý:

Bộ sưu tập: Tài liệu truy cập mở

ID: 325810

 The ease with which workers can move between sectors has a strong impact on the effects on labor markets of shocks such as changes in world prices or migration flows. This paper introduces an approach to labor mobility with frictions under which worker capabilities (their efficiencies in different sectors) depend on their sector affiliation. If workers in sector a move to sector a', their efficiency shortfall due to a capability misfit compared to what is needed in a' (and possessed by workers already in a') is measured by a proximity parameter, 0 ≤ proxa,a' ≤ 1. If proxa,a' <
  1, the efficient quantity reaching a' is below the physical quantity. In this setting, profit-maximizing producers are willing to pay the same wage per efficiency unit irrespective of worker origin and thus pay less efficient workers a lower wage per physical unit. This approach to labor mobility is tested in a static CGE model that is applied to an illustrative sub-Saharan African dataset with sector proximities defined using the approach of the product-space literature. Simulations of positive export price shocks show that, the higher the proximities, the stronger the labor reallocation and the welfare gains.
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