Additional information is available for the following registered author(s):

• Yazid Dissou
• Bernard Decaluwe

In this study, we analyse the impact of the creation of a customs union among UEMOA (Western African Economic and Monetary Union)countries, with a special emphasis on the labour market structure. The implementation of the customs union reform will translate in most of these countries, into a greater openness, even with third party countries. This greater openness raises concerns in these countries as regards its potential impact on welfare, production and employment. In this study, in contrast to many other papers, we relax the assumption of a perfect functioning of the labour market. We consider the presence of a dualism in the labour market and the existence of a minimum wage for the formal workers. We use a multi-country and multi-sectoral computable general equilibrium model (CGE) to assess the impact of the reform. We find that the presence of a minimum nominal wage for the formal workers may significantly reduce the gains stemming from the customs union reform. Our simulation results indicate that the costs induced by this rigidity may exceed 45%, in some cases, in terms of the reduction in the welfare gains obtained without rigidity.

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Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9917.

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Date of creation: 1999
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Handle: RePEc:lvl:laeccr:9917

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Keywords: Economic integration; Customs union; Labor market; Dualism; Wage rigidity;

Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F15 - International Economics - - Trade - - - Economic Integration
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

This paper has been announced in the following NEP Reports:

• NEP-ALL-2002-04-15 (All new papers)
• NEP-DEV-2002-04-15 (Development)

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This page was last updated on 2009-11-19.