 Cost-Benefit Analysis for Investment Decisions: Chapter 12 (The Economic Opportunity Cost of Labor)Glenn Jenkins (),
Chun-Yan Kuo and
Arnold Harberger ()
No 2011-12, Development Discussion Papers from JDI Executive Programs Abstract: The concept of economic opportunity cost is derived from the recognition that when resources are used for one project, opportunities to use these resources are sacrificed elsewhere. Typically when workers are hired by a project, they are giving up one set of market and non-market activities for an alternative set. The economic opportunity cost of labor (EOCL) is the value to the economy of the set of activities given up by the workers including the non-market costs (or benefits) associated with the change in employment. When determining the EOCL, it is important to remember that labor is not a homogeneous input. It is perhaps the most diverse factor of production in any economy. In this chapter we will examine how the EOCL is estimated in an economy that contains markets for many different types of labor occupations, with variations by region, by quality of employment opportunities (e.g., pleasant, unpleasant, permanent, temporary, etc.) that affect the EOCL used by a project. Keywords: supply price of labor; labor externalities; temporary jobs; permanent jobs; migration; protected sector; open sector; quasi voluntary unemployment; unemployment insurance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:205 Access Statistics for this paper More papers in Development Discussion Papers from JDI Executive Programs Contact information at EDIRC. |
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