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A Cge Model for Labour Policy Assessment

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  • Margherita Scarlato

Abstract

In the less developed regions of Italy, the so-called Mezzogiorno, the level of human capital is lower compared to the advanced regions od the Centre-North. We use a Computable General Equilibrium (Cge) Model to show that an increase in the demand and supply of skilled labor in the human capital-scarce regions has a smaller impact on the production activities, the aggregate income and the investments of both North and South compared to an equivalent increase in the human capital-abundant regions. This result leads to a wrong incentive for the private agents towards the underinvestment in human capital and locks the Southern regions in a trap at a low level of both economic development and human capital accumulation. Absent suitable shocks or policy interventions, this outcome is self-reinforcing.

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Bibliographic Info

Article provided by Associazione Rossi Doria in its journal QA.

Volume (Year): (2002)
Issue (Month): 3 (November)
Pages:

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Handle: RePEc:rar:journl:0166

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Related research

Keywords: Human Capital; Cge Models; Regional Gaps;

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  1. Mariano D'Antonio & Margherita Scarlato, 2000. "Capitale umano e sviluppo economico un modello di equilibrio economico generale per il centro-nord e il mezzogiorno d'Italia," Departmental Working Papers of Economics - University 'Roma Tre' 0016, Department of Economics - University Roma Tre.
  2. Olivier Bontout & Sébastien Jean, 2000. "What Drove Relative Wages in France? Structural Decomposition Analysis in a General Equilibrium Framework, 1970-1992," Working Papers 2000-03, CEPII research center.
  3. Andrea Bassanini & Jørn Henrik Rasmussen & Stefano Scarpetta, 1999. "The Economic Effects of Employment-Conditional Income Support Schemes for the Low-Paid: An Illustration from a CGE Model Applied to Four OECD Countries," OECD Economics Department Working Papers 224, OECD Publishing.
  4. Olivier Bontout & Sébastien Jean, 1998. "Wages and Unemployment: Trade-off Under Different Labour Market Paradigms," Working Papers 1998-13, CEPII research center.
  5. repec:rtv:ceiswp:121 is not listed on IDEAS
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