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External income, De-industrialisation and Labour Mobility

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  • Wessel N. Vermeulen

    (CREA, University of Luxembourg)

Abstract

Relaxing the assumption of fixed labour in a general equilibrium model studying the impact of resource income on the allocation of labour across sectors offers insights on how labour mobility may mitigate adverse effects such as de-industrialisation caused by resource income. The theoretical model suggests clear signs of the impact of labour (downward) and the resource income (upward) on the relative size of the service sector. Indirect effects are visible through the interactions of both variables on each other. The model is estimated in a fixed effect panel model, which offers support to the model’s direct and indirect effects.

Suggested Citation

  • Wessel N. Vermeulen, 2011. "External income, De-industrialisation and Labour Mobility," DEM Discussion Paper Series 11-20, Department of Economics at the University of Luxembourg.
  • Handle: RePEc:luc:wpaper:11-20
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    References listed on IDEAS

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    More about this item

    Keywords

    Booming sectors; Migration; de-industrialisation;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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