The Labour Market in CGE Models
100 Pages Posted: 18 Jan 2012
Date Written: October 1, 2011
Abstract
This chapter reviews options of labor market modelling in a CGE framework. On the labor supply side, two principal modelling options are distinguished and discussed: aggregated, representative households and micro simulation based on individual household data. On the labor demand side, we focus on the substitution possibilities between different types of labor in production. With respect to labor market coordination, we discuss several wage-forming mechanisms and involuntary unemployment.
Keywords: computable general equilibrium model, labour market, labour supply, labour demand, microsimulation, involuntary unemployment
JEL Classification: C68, D58, J20, J64
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