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Incorporating seasonality of labour markets in a general equilibrium framework

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  • Feuerbacher, Arndt
  • Grethe, Harald

Abstract

Seasonality of labour markets is a common feature in many countries, especially in agrarian economies. However, due to data paucity, CGE models are usually solved on an annual basis and thus implicitly assume that there is total flexibility in allocating labour among periods within a year. This paper investigates the relevance of incorporating seasonality of labour markets in general equilibrium models. First, a 2012 social accounting matrix of Bhutan is updated to include seasonal labour accounts. Second, a comparative static CGE model is extended to allow for the depiction of seasonal labour. The methodological development is demonstrated by conducting a stylized scenario. An exogenous food price shock is simulated both using the model with and without incorporation of seasonality.The paper concludes by highlighting further possible approaches and areas on how seasonality can be represented in general equilibrium models.

Suggested Citation

  • Feuerbacher, Arndt & Grethe, Harald, 2017. "Incorporating seasonality of labour markets in a general equilibrium framework," Conference papers 332823, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332823
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