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Evaluating the Social Cost of Job Creation



    (Department of Finance, Canada)


The paper discusses the principal labour market distortions and their effects on the social cost of jobs created in industrial projects. Two alternative approaches – a partial and a general equilibrium analysis - have been put forth in a systematic way to estimate the social cost of job creation. The general equilibrium analysis provides a dynamic analysis, allowing for labour migration between regions and the multiplier effects of job creation projects on the project region. The paper also presents two case studies -- a coal project in northeast British Columbia and a newsprint mill project in Quebec -- to demonstrate how economic theory can be applied to the practical evaluation of industrial projects.

Suggested Citation

  • Chun-Yan Kuo, 1997. "Evaluating the Social Cost of Job Creation," Development Discussion Papers 1991-12, JDI Executive Programs.
  • Handle: RePEc:qed:dpaper:174

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    References listed on IDEAS

    1. Glenn Jenkins & JOHN EVANS, 1977. "Measurement Of The Foreign Exchange And Sales Tax Externality On The Value Added Of Labour," Development Discussion Papers 1977-02, JDI Executive Programs.
    2. Grady, Patrick & Muller, R. Andrew, 1986. "On The Use and Misuse of Input-Output Based Impact Analysis in Evaluation," MPRA Paper 22063, University Library of Munich, Germany.
    3. Glenn P. Jenkins & Chun-Yan Kuo, 1978. "On Measuring the Social Opportunity Cost of Permanent and Temporary Employment," Canadian Journal of Economics, Canadian Economics Association, vol. 11(2), pages 220-239, May.
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    More about this item


    multiplier effects; job creation; supply price; induced migrants; social cost; unemployment insurance benefit;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate


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