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Underemployment in a Computable General Equilibrium Model

Author

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  • Roberto Roson

    (Department of Economics, University Of Venice CÃ Foscari; Loyola Andalusia University; GREEN Bocconi University Milan)

Abstract

This paper presents a methodology to account, in a computable general equilibrium model, for the presence of underemployment in an economic system. The methodology is based on the estimation of a matrix, mapping different categories of workers to levels of educational attainment. A procedure is proposed, which allows recalculating the matrix after the realization of a simulation with a CGE model, when employment levels are varied. In this way, a new matrix is made consistent with the simulation results, identifying a new equilibrium in the labor market, which entails a different combination of unemployment and underemployment.

Suggested Citation

  • Roberto Roson, 2022. "Underemployment in a Computable General Equilibrium Model," Working Papers 2022:17, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2022:17
    as

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    References listed on IDEAS

    as
    1. Burfisher,Mary E., 2021. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9781108748025, December.
    2. Bell, David N.F. & Blanchflower, David G., 2018. "The lack of wage growth and the falling NAIRU," National Institute Economic Review, Cambridge University Press, vol. 245, pages 40-55, August.
    3. Erwin Corong & Thomas Hertel & Robert McDougall & Marinos Tsigas & Dominique van der Mensbrugghe, 2017. "The Standard GTAP Model, version 7," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 1-119, June.
    4. Burfisher,Mary E., 2021. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9781108490085, December.
    5. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    6. David N.F. Bell & David G. Blanchflower, 2013. "Underemployment in the UK Revisited," National Institute Economic Review, National Institute of Economic and Social Research, vol. 224(1), pages 8-22, May.
    7. Weicheng Lian & Mr. Malhar S Nabar & Mr. Gee Hee Hong & Zsoka Koczan, 2018. "More Slack than Meets the Eye? Recent Wage Dynamics in Advanced Economies," IMF Working Papers 2018/050, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Underemployment; Unemployment; Labor Market; Computable General Equilibrium Models;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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