OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Empirical Specifications for a General Equilibrium Analysis of Labor Market Policies and Adjustments

Economic globalization is increasingly challenging traditional, closedeconomy intuition about linkages between demand, supply, and employment. In some parts of the world, substantial employment growth is arising from external demand while, in other areas, there is growing concern that domestic demand is being diverted to external sources of supply and employment. To better understand and predict how employment patterns will evolve with expanding international trade, the best of labor market theory must be brought into an empirical general equilibrium framework which can capture these complex interactions. The purpose of the present study is to review the innovative recent literature on labor markets and distill essential elements which can be implemented in a practical manner. The result is a taxonomy of new labor market theories and an agenda for new empirical research on wage and employment adjustment ...


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