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Regional Labour Market Adjustment to Competition Policy Reforms: A Dynamic CGE Framework for Assessment

Author

Listed:
  • James Giesecke

    () (Monash University)

  • John R. Madden

    (Monash University)

Abstract

In this paper we investigate the impact on regional labour markets of an increase in primary factor productivity in the Utilities sector. We conjecture that such an increase in productivity is illustrative of the direct effects of national competition policy (NCP). We compute, at the regional level, indices of net labour inputs that are lost from such a productivity shock, finding that the direct effects of NCP involve significant labour market adjustment costs. However, those critics of competition policy reforms who have focussed on adjustment costs have ignored important general equilibrium effects such as the mitigation of adjustment costs in other industries, and, in particular, the effects on labour market adjustment from state government fiscal reactions. We also find that, so long as these general equilibrium effects are modelled, policy makers interested in regional adjustment costs can use indices of the change in regional employment and unemployment as good proxies for the extent of regional labour market adjustment costs.

Suggested Citation

  • James Giesecke & John R. Madden, 2003. "Regional Labour Market Adjustment to Competition Policy Reforms: A Dynamic CGE Framework for Assessment," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 409-433, September.
  • Handle: RePEc:ozl:journl:v:6:y:2003:i:3:p:409-433
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    Citations

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    Cited by:

    1. Ahmed, Vaqar, 2006. "Regional economic modelling: evaluating existing methods and models for constructing an Irish prototype," MPRA Paper 7650, University Library of Munich, Germany.
    2. James A. Giesecke & John R. Madden, 2013. "Evidence-based regional economic policy analysis: the role of CGE modelling," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 6(2), pages 285-301.
    3. Glyn Wittwer & Mark Horridge, 2010. "Bringing Regional Detail to a CGE Model using Census Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 229-255.
    4. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.

    More about this item

    Keywords

    Urban; Rural; and Regional Economics: Regional Migration; Regional Labor Markets; Population General Regional Economics: Econometric and Input-Output Models; Other Models Computable and Other Applied General Equilibrium Models Mobility; Unemployment; and Vacancies: General Technological Change: Government Policy;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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