Shutes, Lindsay (2012) Labour Supply Curves for EU Member and Candidate States: An applied general equilibrium analysis. Factor Markets Working Paper No. 26, June 2012. [Working Paper]
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Abstract
This paper introduces a more sophisticated modelling of the labour market functioning of the European member and candidate states through the introduction of labour supply curves in an applied general equilibrium model. A labour supply curve offers a middle way in labour supply modelling, sitting between the two commonly adopted extremes of spare capacity and full employment. The first part of the paper outlines the theoretical foundation of the labour supply curve. Real world data is then used to derive labour supply curves for each member state, along with Croatia and Turkey. Finally, the impact of the newly specified labour markets on the results of an illustrative scenario involving reform of the common agricultural policy is explored. The results of computable general equilibrium analysis with the labour supply curve confirm the theoretical expectation that modelling the labour supply through an upwards-sloping curve produces results that lie between the extremes of spare capacity of the labour factor and fully employed labour. This specification captures a greater degree of heterogeneity in the labour markets of the member and candidate states, allowing for a more nuanced modelling of the effects of policy reform, including welfare effects.
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Item Type: | Working Paper |
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Subjects for non-EU documents: | EU policies and themes > Policies & related activities > agriculture policy Countries > Turkey Countries > Croatia EU policies and themes > Policies & related activities > employment/labour market > labour/labor |
Subjects for EU documents: | UNSPECIFIED |
EU Series and Periodicals: | UNSPECIFIED |
EU Annual Reports: | UNSPECIFIED |
Series: | Series > Centre for European Policy Studies (Brussels) > Factor Markets Working Papers |
Depositing User: | Phil Wilkin |
Official EU Document: | No |
Language: | English |
Date Deposited: | 18 Dec 2014 14:02 |
Number of Pages: | 19 |
Last Modified: | 18 Dec 2014 14:02 |
URI: | http://aei.pitt.edu/id/eprint/58538 |
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