A segmented labor supply model estimation for the construction of a CGE microsimulation model: An application to the Philippines

Dorothee Boccanfuso and Luc Savard

Cahiers de recherche from Departement d'économique de l'École de gestion à l'Université de Sherbrooke

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 exempt from formal market rigidities 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 paper we aim to identify the main characteristics differentiating the labor supply of workers on the informal and formal market in the Philippines while estimating these two labor supplies, capturing discrete choice or changes in employment status. We use these estimates to construct a labor 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 contribute to shedding some light into 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 CGE model.

Keywords: labor supply; informal sector; microsimulation; discrete choice model; Philippines (search for similar items in EconPapers)
JEL-codes: C35 C81 J24 O17 O53 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-11
New Economics Papers: this item is included in nep-cmp, nep-dcm, nep-iue, nep-lab and nep-lma
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1119.pdf (application/pdf)

Related works:
Journal Article: A Segmented Labour Supply Model Estimation for the Construction of a CGE Microsimulation Model: An Application to the Philippines (2012)
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:shr:wpaper:11-19

Access Statistics for this paper

More papers in Cahiers de recherche from Departement d'économique de l'École de gestion à l'Université de Sherbrooke Contact information at EDIRC.
Bibliographic data for series maintained by Jean-François Rouillard ().