IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/95781.html
   My bibliography  Save this paper

A General Equilibrium Analysis of Unskilled Labor Entry and Skilled Labor Exit in Iran

Author

Listed:
  • Haqiqi, Iman
  • Bahalou, Marziyeh

Abstract

Labor migration affects domestic labor markets. This paper analyzes the impacts of decline in domestic skilled labor and increase inflow of foreign unskilled labor on employment and sectoral production in Iran. For this purpose, we develop a multi-sector computable general equilibrium model with both skilled and unskilled workers. To calibrate the model, we construct a Micro Consistent Matrix as a modified Social Accounting Matrix (SAM). We consider a counterfactual scenario of 10% increase in unskilled labor and 10% decline in skilled labor. The simulation results show that decline in skilled labor and increase in unskilled labor would increase the wage rate of skilled labor. Except for agriculture, the employment of unskilled labor in other sectors will increase by 1.6% to 14.4%. However, the domestic income is decreased despite of increasing wage rate of the skilled labor. The production of all sectors also declines by 2.9% to 3.9%, in such a way agriculture, mining and industry sectors face with the highest decrease in production.

Suggested Citation

  • Haqiqi, Iman & Bahalou, Marziyeh, 2015. "A General Equilibrium Analysis of Unskilled Labor Entry and Skilled Labor Exit in Iran," MPRA Paper 95781, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95781
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/95781/1/MPRA_paper_95781.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wong, Kar-yiu & Yip, Chong Kee, 1999. "Education, economic growth, and brain drain," Journal of Economic Dynamics and Control, Elsevier, vol. 23(5-6), pages 699-726, April.
    2. McCulloch, Rachel & Yellen, Janet L., 1980. "Factor market monopsony and the allocation of resources," Journal of International Economics, Elsevier, vol. 10(2), pages 237-247, May.
    3. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
    4. Mr. William Carrington & Ms. Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 1998/102, International Monetary Fund.
    5. Vladimir Borgy & Xavier Chojnicki, 2009. "Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighborhood Regions," Economie Internationale, CEPII research center, issue 119, pages 115-153.
    6. Alain P. Bala, 2018. "The Measurement of Institutions and Instability in Democratic Republic of Congo, 1880-2010," Working Papers 166, Economic Research Southern Africa.
    7. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
    8. Aziz Atamanov & Matthias Luecke & Toman Omar Mahmoud & Roman Mogilevsky & Kseniya Tereshchenko & Natalia A. Tourdyeva & Ainura Uzagalieva & Vitaly Vavryschuk, 2009. "Income and Distribution Effects of Migration and Remittances: an Analysis Based on CGE Models for Selected CIS Countries," CASE Network Reports 0086, CASE-Center for Social and Economic Research.
    9. Michel Beine & Frederic Docquier & Hillel Rapoport, 2006. "Measuring International Skilled Migration: New Estimates Controlling for Age of Entry," RF Berlin - CReAM Discussion Paper Series 0613, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    10. Alina Hagiu, 2007. "Costs and benefits of the international labor migration," Manager Journal, Faculty of Business and Administration, University of Bucharest, vol. 5(1), pages 27-36, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haqiqi, Iman & Bahalou, Marziyeh & Shamsaee, Arezoo, 2017. "An Economic General Equilibrium Model for Evaluation of Production Support Policies in Developing Countries," MPRA Paper 95865, University Library of Munich, Germany.
    2. Haqiqi, Iman & Yasharel, Sepideh, 2018. "Removing Fossil Fuel Subsidies to Help the Poor," MPRA Paper 95907, University Library of Munich, Germany.
    3. Aghababaei, Mohammad Ebrahim, 2019. "General Equilibrium Resource Elasticity in an Open Resource-Abundant Economy," MPRA Paper 97851, University Library of Munich, Germany.
    4. Haqiqi, Iman & Manzoor, Davood, 2012. "Environmental Impacts of Phasing out Energy Subsidies," MPRA Paper 95688, University Library of Munich, Germany, revised 2016.
    5. Bahalou, Marziyeh & Haqiqi, Iman, 2016. "A General Equilibrium Model with Labor-Leisure and Domestic-Abroad Choice for Assessment of Labor Migration in a Small Open Economy," MPRA Paper 95863, University Library of Munich, Germany.
    6. Haqiqi, Iman & Bahalou, Marziyeh & Hamidi, Razieh, 2014. "Measurement and Evaluation of Equality of Opportunity: A Numerical Look at Education, Health, and Income Inequality," MPRA Paper 95866, University Library of Munich, Germany.
    7. Haqiqi, Iman & Mirian, Narges, 2015. "A Financial General Equilibrium Model for Assessment of Financial Sector Policies in Developing Countries," MPRA Paper 95841, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elisabetta Lodigiani, 2009. "Diaspora Externalities as a Cornerstone of the New Brain Drain Literature," Development Working Papers 277, Centro Studi Luca d'Agliano, University of Milano.
    2. Docquier, Frédéric, 2006. "Brain Drain and Inequality Across Nations," IZA Discussion Papers 2440, Institute of Labor Economics (IZA).
    3. Chaitali Sinha, 2017. "International Migration and Welfare Implications," South Asian Journal of Macroeconomics and Public Finance, , vol. 6(2), pages 209-229, December.
    4. Destrée, Nicolas & Gente, Karine & Nourry, Carine, 2021. "Migration, remittances and accumulation of human capital with endogenous debt constraints," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 38-60.
    5. Catia Batista & Aitor Lacuesta & Pedro Vicente, 2009. "Micro evidence of the brain gain hypothesis: The case of Cape Verde," Working Papers 0902, Banco de España.
    6. Michael E. Cummings & Alan Gamlen, 2019. "Diaspora engagement institutions and venture investment activity in developing countries," Journal of International Business Policy, Palgrave Macmillan, vol. 2(4), pages 289-313, December.
    7. Mr. Sanjeev Gupta & Ms. Catherine A Pattillo & Ms. Smita Wagh, 2007. "Impact of Remittances on Poverty and Financial Development in Sub-Saharan Africa," IMF Working Papers 2007/038, International Monetary Fund.
    8. Calogero Carletto & Jennica Larrison & Çaglar Özden, 2014. "Informing migration policies: a data primer," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 2, pages 9-41, Edward Elgar Publishing.
    9. Hanson, Gordon H., 2010. "International Migration and the Developing World," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4363-4414, Elsevier.
    10. Khraiche, Maroula & Boudreau, James, 2020. "Can lower remittance costs improve human capital accumulation in Africa?," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 1000-1021.
    11. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    12. Irene Mosca & Alan Barrett, 2016. "The impact of adult child emigration on the mental health of older parents," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 687-719, July.
    13. Frederic, DOCQUIER & B. Lindsay, LOWELL & Abdeslam, MARFOUK, 2007. "A gendered assessment of the brain drain," Discussion Papers (ECON - Département des Sciences Economiques) 2007045, Université catholique de Louvain, Département des Sciences Economiques.
    14. Youqin Huang & Zai Liang & Qian Song & Ran Tao, 2020. "Family Arrangements and Children's Education Among Migrants: A Case Study of China," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 44(3), pages 484-504, May.
    15. Ralitza Dimova & Fran�ois-Charles Wolff, 2015. "Remittances and Chain Migration: Longitudinal Evidence from Bosnia and Herzegovina," Journal of Development Studies, Taylor & Francis Journals, vol. 51(5), pages 554-568, May.
    16. Ma, Yechi & Chen, Zhiguo & Shinwari, Riazullah & Khan, Zeeshan, 2021. "Financialization, globalization, and Dutch disease: Is Dutch disease exist for resources rich countries?," Resources Policy, Elsevier, vol. 72(C).
    17. Kalaj, Ermira Hoxha, 2010. "Remittances and Human Capital Investment: Evidence from Albania," MPRA Paper 49210, University Library of Munich, Germany.
    18. Zai Liang & Feinuo Sun, 2020. "The lasting impact of parental migration on children's education and health outcomes: The case of China," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 43(9), pages 217-244.
    19. Sylvie Démurger & Hui Xu, 2011. "Left-Behind Children and Return Decisions of Rural Migrants in China," Post-Print halshs-00625636, HAL.
    20. Kate Ambler & Diego Aycinena & Dean Yang, 2015. "Channeling Remittances to Education: A Field Experiment among Migrants from El Salvador," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 207-232, April.

    More about this item

    Keywords

    Labor market; Employment; General equilibrium; Micro Consistent Matrix;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:95781. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.