Labor Market Representation in Quantitative Macroeconomic Models for Developing Countries: An Application to Cote D'Ivoire
Summary:
This paper presents a quantitative macroeconomic model that accounts for key features of the labor market in developing countries. Primarily inspired by Côte d’Ivoire, the model contrasts a formal urban sector, where wages are rigidly fixed and employment is submitted to firms profit-seeking behavior, to urban and rural informal sectors, where wages are flexible and employment is affected by fluctuations in formal sector employment. Dynamic simulations assess the impact on key macroeconomic variables of a terms of trade improvement, a public wage decrease, and an exchange rate adjustment, highlighting the roles of rural-urban migrations and capital accumulation in the informal urban sector.
Series:
Working Paper No. 1995/087
Subject:
Consumption Labor Labor force Labor markets National accounts Private consumption Wages
Notes:
Also published in Staff Papers, Vol. 43, No. 2, June 1996.
English
Publication Date:
August 1, 1995
ISBN/ISSN:
9781451850963/1018-5941
Stock No:
WPIEA0871995
Pages:
43
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