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Trade, capital accumulation and structural unemployment: an empirical study of the Singapore economy

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  • Kee, Hiau Looi
  • Hoon, Hian Teck

Abstract

This paper studies the factors responsible for the secular decline of Singapore’s unemployment rate over the period 1966-2000 in an environment of low and stable inflation rates. We introduce wage bargaining and unions into a specific-factors, two-sector economy with an export sector and a non-tradable sector to obtain an endogenous natural unemployment rate. Increases in the relative export price and capital stock in the export sector are predicted to reduce structural unemployment. These hypotheses could not be rejected based on structural estimations and co-integration regressions. Empirically, capital accumulation in the export sector explains most of the decline in Singapore’s unemployment rate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 77 (2005)
Issue (Month): 1 (June)
Pages: 125-152

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Handle: RePEc:eee:deveco:v:77:y:2005:i:1:p:125-152

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Cited by:
  1. Petrucci, Alberto, 2006. "Wealth Accumulation and Growth in a Specific-Factors Model of Trade and Finance," Economics & Statistics Discussion Papers esdp06029, University of Molise, Dept. EGSeI.
  2. Gnanaraj Chellaraj & Keith E. Maskus & Aaditya Mattoo, 2013. "Labor Skills and Foreign Investment in a Dynamic Economy: Estimating the Knowledge-capital Model for Singapore," Review of Development Economics, Wiley Blackwell, vol. 17(4), pages 627-643, November.
  3. Hoekman & Bernard & Winters, L. Alan, 2005. "Trade and employment : stylized facts and research findings," Policy Research Working Paper Series 3676, The World Bank.
  4. Almosabbeh, Imadeddin, 2008. "العوامل المؤثرة في البطالة في الجمهورية العربية السورية دراسة تطبيقية باستخدام منهجية التكامل المشترك
    [The Ef
    ," MPRA Paper 41871, University Library of Munich, Germany.
  5. Rudy Rahmaddi & Masaru Ichihashi, 2012. "The impact of foreign direct investment on host country exports: Sector based evidence from Indonesian manufacturing," IDEC DP2 Series 2-10, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).

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