A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa
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 w...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/212941500556224046/A-proximity-based-approach-to-labor-mobility-in-CGE-models-with-an-application-to-Sub-Saharan-Africa http://hdl.handle.net/10986/27958 |
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okr-10986-279582021-06-08T14:42:48Z A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa Lofgren, Hans Cicowiez, Martin CGE MODELS LABOR MOBILITY FACTOR MOBILITY WAGE DIFFERENTIALS DEVELOPMENT POLICY DEVELOPMENT PLANNING 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. 2017-08-24T20:07:19Z 2017-08-24T20:07:19Z 2017-07 Working Paper http://documents.worldbank.org/curated/en/212941500556224046/A-proximity-based-approach-to-labor-mobility-in-CGE-models-with-an-application-to-Sub-Saharan-Africa http://hdl.handle.net/10986/27958 English en_US Policy Research Working Paper;No. 8151 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Sub-Saharan Africa |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
CGE MODELS LABOR MOBILITY FACTOR MOBILITY WAGE DIFFERENTIALS DEVELOPMENT POLICY DEVELOPMENT PLANNING |
| spellingShingle |
CGE MODELS LABOR MOBILITY FACTOR MOBILITY WAGE DIFFERENTIALS DEVELOPMENT POLICY DEVELOPMENT PLANNING Lofgren, Hans Cicowiez, Martin A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| geographic_facet |
Africa Sub-Saharan Africa |
| relation |
Policy Research Working Paper;No. 8151 |
| description |
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. |
| format |
Working Paper |
| author |
Lofgren, Hans Cicowiez, Martin |
| author_facet |
Lofgren, Hans Cicowiez, Martin |
| author_sort |
Lofgren, Hans |
| title |
A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| title_short |
A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| title_full |
A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| title_fullStr |
A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| title_full_unstemmed |
A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa |
| title_sort |
proximity-based approach to labor mobility in cge models with an application to sub-saharan africa |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/212941500556224046/A-proximity-based-approach-to-labor-mobility-in-CGE-models-with-an-application-to-Sub-Saharan-Africa http://hdl.handle.net/10986/27958 |
| _version_ |
1764466229989343232 |