A Segmented Labour Supply Model Estimation for the Construction of a CGE Microsimulation Model: An Application to the Philippines

Dorothee Boccanfuso and Luc Savard

Margin: The Journal of Applied Economic Research, 2012, vol. 6, issue 2, 211-234

Abstract: Labour market analysis is an important element to understand the inequality and poverty within a given population. The literature reveals that the informal sector is characterised by a great deal of flexibility and is exempt from formal market rigidities on the one hand, but on the other hand, this sector can constitute a trap from which it is difficult to exit for workers active in the sector with low wages. In this article, we aim to identify the main characteristics differentiating the labour supply of workers on the informal and formal market in the Philippines while estimating these two labour supplies, capturing discrete choice or changes in employment status. We use these estimates to construct a labour supply model that can serve as an input for a broader macro–microsimulation model applied to the Philippines. The results of the estimation provide relatively intuitive findings, highlighting some differences between the two markets. We also shed some light on this macro–microsimulation modelling framework that is generally opaque, in describing how to construct a microsimulation model with endogenous discrete choice model linked to a computable general equilibrium (CGE) model. JEL Classification : C35, O53, J24, C81, O17

Keywords: Labour Supply; Informal Sector; Microsimulation; Discrete Choice Model; Philippines (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/097380101200600206 (text/html)

Related works:
Working Paper: A segmented labor supply model estimation for the construction of a CGE microsimulation model: An application to the Philippines (2011)
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:sae:mareco:v:6:y:2012:i:2:p:211-234

DOI: 10.1177/097380101200600206

Access Statistics for this article

More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research
Bibliographic data for series maintained by SAGE Publications ().