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CGE modeling of the impact of skilled labor movements in ASEAN Economic Community focusing on telecommunication industry

Author

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  • Sudtasan, Tatcha
  • Suriya, Komsan

Abstract

This paper investigates the impact of skilled labor movements in ASEAN Economic Community (AEC) on nationwide economy of Thailand using Computable General Equilibrium model. The paper mainly focuses on the labor movement in telecommunication industry. The model consists of three steps. First, it simulates the impact of raising minimum wage to THB300 and raising salary of bachelor graduates to THB15,000 across-the-board and over the country according to the Raising Income Policy (RIP) of the Thai government. Second, it figures out the impact of the skilled labor movement in telecommunication sector among AEC member countries. Last, it includes the impact of skilled labor movements in 8 occupations that are allowed by the AEC agreement. The results reveal that the RIP causes negative impact to the Thai economy due to the rising costs of production that cannot be compensated by the increasing consumption. Inward skilled labor movement to Thailand in the telecommunication sector leads to the increasing income of engineers and related skilled workers in the country. This yields the positive impact to the economy due to the increasing income of the middle-class people while costs of production do not increase much. The inward skilled labor movements in all 8 occupations will even yield more positive impacts to the Thai economy. However, the positive impacts of the skilled labor movements in AEC cannot compensate the negative impacts of the RIP applied earlier. Therefore, Thailand cannot expect that AEC will boost its economy up to the level before the implementation of RIP.

Suggested Citation

  • Sudtasan, Tatcha & Suriya, Komsan, 2014. "CGE modeling of the impact of skilled labor movements in ASEAN Economic Community focusing on telecommunication industry," MPRA Paper 54057, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54057
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    File URL: https://mpra.ub.uni-muenchen.de/54057/1/MPRA_paper_54057.pdf
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    References listed on IDEAS

    as
    1. Orakanya Kanjanatarakul & Komsan Suriya, 2012. "Economic impact of agro-industrial sector on nationwide economy of Thailand: A general equilibrium approach," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(4), pages 61-66, December.
    2. Komsan Suriya Author-Email suriyakomsan@gmail.com & Tatcha Sudtasan, 2013. "KS-CGE Model V2012 TypeIII: Mathematical settings and its applications," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(2), pages 53-56, June.
    3. Orakanya Kanjanatarakul & Komsan Suriya, 2013. "Role of government funding on the empowerment of the Royal Project Foundation: A general equilibrium approach," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(1), pages 1-28, March.
    4. Sofyan SYAHNUR, 2010. "The Analysis of the Impact of Oil Prices Shock on the Poor Relied on the Existing Distribution of Income Pattern," EcoMod2010 259600162, EcoMod.
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    Cited by:

    1. Ayala, Edgardo & Chapa, Joana & GarcĂ­a, Lester & Hibert, Abel, 2018. "Welfare effects of the Telecommunication Reform in Mexico," Telecommunications Policy, Elsevier, vol. 42(1), pages 24-36.
    2. Autsawin Suttiwichienchot & Nattapong Puttanapong, 2014. "A Study on Internal Labor Movement and Policy Multiplier in Thailand," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 2(3), pages 57-68.

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    More about this item

    Keywords

    Computable general equilibrium model; telecommunication industry; ASEAN Economic Community; labor movement; wage policy;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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