A General Equilibrium Analysis of Unskilled Labor Entry and Skilled Labor Exit in Iran

Iman Haqiqi and Marziyeh Bahalou

MPRA Paper from University Library of Munich, Germany

Abstract: Labor migration affects domestic labor markets. This paper analyzes the impacts of decline in domestic skilled labor and increase inflow of foreign unskilled labor on employment and sectoral production in Iran. For this purpose, we develop a multi-sector computable general equilibrium model with both skilled and unskilled workers. To calibrate the model, we construct a Micro Consistent Matrix as a modified Social Accounting Matrix (SAM). We consider a counterfactual scenario of 10% increase in unskilled labor and 10% decline in skilled labor. The simulation results show that decline in skilled labor and increase in unskilled labor would increase the wage rate of skilled labor. Except for agriculture, the employment of unskilled labor in other sectors will increase by 1.6% to 14.4%. However, the domestic income is decreased despite of increasing wage rate of the skilled labor. The production of all sectors also declines by 2.9% to 3.9%, in such a way agriculture, mining and industry sectors face with the highest decrease in production.

Keywords: Labor market; Employment; General equilibrium; Micro Consistent Matrix (search for similar items in EconPapers)
JEL-codes: C68 J21 J22 J6 J61 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in The Economic Research 15.3(2015): pp. 67-89

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/95781/1/MPRA_paper_95781.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:95781

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().