Content Protection, Resource Allocation, and Variable Labour Supply

Michael Ka-Yiu Fung

Canadian Journal of Economics, 1994, vol. 27, issue 1, 175-82

Abstract: A three-sector general equilibrium model is used to study the implications of an increase in content protection under the assumption of variable labor supply. The role of variable labor supply is highlighted in the paper. An increase in domestic content requirements increases the equilibrium labor supply, which magnifies the policy effects on the output levels (of agricultural, manufacturing, and intermediate goods) and the imports of foreign intermediates. Furthermore, the policy change may increase the national income of the economy while the national welfare is decreased.

Date: 1994
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