Adjustment costs in labour markets and the distributional effects of trade liberalization: Analytics and calculations for Vietnam

Chan, Nguyen; Dung, Tran Kim; Ghosh, Madanmohan; Whalley, John

doi:10.1016/j.jpolmod.2005.06.010

Cited by 15 publications

(14 citation statements)

References 14 publications

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“…The values for the elasticities of substitution in consumption have been adopted from Chan et al (2005) with permission from the authors. At the upper level of the nests, these values of elasticities are based on their assumptions and in line with central tendency estimates available in Marques (1990), Orcutt (1950), Piggot and Whalley (1985) and Shoven and Whalley (1992).…”

Section: Model Specification and Datamentioning

confidence: 99%

Impacts of Trade Liberalisation Commitments on the Vietnamese Economy: A CGE Approach

Doanh

Heo

2009

World Economy

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This article quantifies the economic effects of tariff reduction following Vietnam's WTO accession. It differs from previous studies in several aspects. First, the model incorporates non-standard features of the Vietnamese economy (e.g. changes in the domestic tax system). Second, the model divides Vietnamese households into 10 groups, allowing for the assessment of household welfare and income distribution. Third, the model has been run employing the most up-to-date database available. The major findings are summarised as follows. First, Vietnam as a whole would benefit from trade liberalisation. Second, the overall gain would be accompanied by a redistribution of income and a moderate increase in inequality between the rich and the poor. Third, concerning sectoral output, export-oriented sectors, sectors with large shares of input in total imports, and those with increased domestic demands are likely to expand, whereas, in contrast, domestic-oriented sectors are likely to contract. Measures to increase labour mobility, target disadvantaged groups and areas, and further liberalise service sectors are recommended as the recipe for effective utilisation of integration, as well as a more equitable pattern of growth. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd.

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Section: Model Specification and Datamentioning

confidence: 99%

Impacts of Trade Liberalisation Commitments on the Vietnamese Economy: A CGE Approach

Doanh

Heo

2009

World Economy

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“…Chan, Dung, Ghosh and Whalley (2005) examine the distributional impact of eliminating import tariffs using a static CGE model with various labour market scenarios assuming different adjustment costs. They find that Vietnam's import trade liberalisation is pro-rich and anti-poor when perfectly competitive labour markets are assumed since richer households tend to consume more imported goods while restricting labour mobility hurt poor and rural households who cannot benefit by moving to work in the higherpaying industrial service sector.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Trade Liberalisation on Household Welfare in a Developing Country with Imperfect Labour Markets

Seshan

2013

The Journal of Development Studies

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I develop an empirical methodology to assess the distributional impact of trade-induced price shocks when labour markets are imperfect. The proposed methodology relates exogenous variations in prices to changes in household welfare using a separable agricultural household model that flexibly allows the data to determine the degree of labour market imperfections. Applying this approach to Vietnam, I investigate the impact of agriculture trade liberalisation between 1993 and 1998 on overall household welfare, measured using per capita household expenditure. I find that accounting for labour market imperfections results in welfare gains that are nearly four times larger than those found when assuming complete labour markets.

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“…2. For lack of precise information on the width of this cost, we follow Chan et al (2005) who postulate that migration costs are equal to 10% of the international migratory flow. For internal migration, the cost of labour mobility is obviously lower than international migration and we suppose that internal migration costs are equal to 5% of the internal migratory flow.…”

Section: Resultsmentioning

confidence: 99%

“…Migration costs are modelled à la Chan et al (2005): when workers migrate from a region to another due to wage differentials, their net wage in the region of destination is lower than the effective wage in this region, and the difference is due to migration costs. According to the authors, this is equivalent to a reduction in a household's available working time in the region of destination and results in a reduction of his labour endowment.…”

Section: Migration Costsmentioning

confidence: 99%

Is international migration a cure for Moroccan unemployment?

Karam

Decaluwé

2010

The Journal of North African Studies

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Recently, much research interest has been directed towards the impact of migration on the sending country. However, we think that this literature does not successfully analyse the effects of migration on unemployment and wage rates, especially in urban areas. It studies the effect of one kind of migration flow, mainly international migration, on the labour market in the country of origin and shows that international migration is able to reduce the unemployment rate and/or raise the wage rate. However, it is common to find sending countries simultaneously affected by inflows and outflows of workers. Using a detailed computable general equilibrium (CGE) model applied to the Moroccan economy, we show that if we simultaneously take into account Moroccan emigration to the European Union (EU), immigration from Sub-Saharan Africa into Moroccan urban areas and rural-urban migration, the impact on Moroccan urban labour market disaggregated by professional categories is ambiguous.

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Adjustment costs in labour markets and the distributional effects of trade liberalization: Analytics and calculations for Vietnam

Cited by 15 publications

References 14 publications

Impacts of Trade Liberalisation Commitments on the Vietnamese Economy: A CGE Approach

Impacts of Trade Liberalisation Commitments on the Vietnamese Economy: A CGE Approach

The Impact of Trade Liberalisation on Household Welfare in a Developing Country with Imperfect Labour Markets

Is international migration a cure for Moroccan unemployment?

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