Estimation of the Economic Opportunity Cost of Labour: An Operational Guide for Ghana

Glenn Jenkins (), Richard Sogah (), Abdallah Othman (), Mikhail Miklyaev and Çagay Coskuner ()
Additional contact information
Richard Sogah: Department of Economics, Eastern Mediterranean University, Gazimagusa 99628, Turkey
Abdallah Othman: Cambridge Resources International Inc.
Çagay Coskuner: Department of Economics, Eastern Mediterranean University, Gazimagusa 99628, Turkey

No 2023-09, Development Discussion Papers from JDI Executive Programs

Abstract: The implementation of projects often affects employment through direct job creation, indirectly stimulating employment, or increasing labour force participation. These changes in employment have significant benefits and costs to both labour and society. However, the estimation of job creation benefits is challenging because of the large diversities in labour inputs. We attempt to address this issue by using the supply price approach to develop an analytical framework based on sound microeconomic principles to assist project analysts to arrive at justifiable empirical estimates of the economic opportunity cost of labour for a wide range of labour types across a set of diverse situations and market conditions in Ghana. Accordingly, the economic opportunity cost of labour will vary by skill, location, and labour market conditions that need to be incorporated into its estimation. In this analysis, the estimation has been carried out to quantify the economic opportunity cost of labour, as well as the labour externalities corresponding to the two broad categories of labour: skilled and unskilled. Similarly, these estimates refer to groups of labour according to areas of residence: rural and urban.

Keywords: Ghana; job creation; economic cost; supply price; informal labour; formal labour; labour externality (search for similar items in EconPapers)
JEL-codes: D61 O2 Q42 Q48 (search for similar items in EconPapers)
Pages: 22 Pages
Date: 2023-10-17
New Economics Papers: this item is included in nep-ppm
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Related works:
Journal Article: Estimation of the Economic Opportunity Cost of Labour: An Operational Guide for Ghana (2023)
Working Paper: Estimation of the Economic Opportunity Cost of Labour: An Operational Guide for Ghana (2023)
Working Paper: Estimation of the Economic Opportunity Cost of Labor: An Operational guide for Ghana (2022)
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