Browsing by Subject "Israel"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Publication
    A 2004 social accounting matrix for Israel : documentation of an economy-wide database with a focus on agriculture, the labour market, and income distribution
    (2011) Siddig, Khalid; Flaig, Dorothee; Luckmann, Jonas; Grethe, Harald
    This document describes the Israeli Social Accounting Matrix (SAM) for the year 2004, developed by the Agricultural and Food Policy Group at the University of Hohenheim. The SAM is a part of a larger research project which aims to analyse several economic, trade, and labour policies in the context of economic integration of agriculture between Israel and the West Bank. Data are obtained from various sources in Israel. Sources include the Israeli Central Bureau of Statistics (ICBS), the Central Bank of Israel (CBI), and the Israeli Tax Authority (ITA). Data from sources outside of Israel are used to fill-in some gaps in the domestic reports. External sources include the World Trade Organization (WTO), the Organisation for Economic Co-operation and Development (OECD), and the World Bank. The SAM provides data on 47 sectors with activities separated from commodities, 36 labour force types, 10 household groups, as well as 17 tax accounts in addition to 37 accounts reserved for taxes on production factors. A topdown approach is pursued by first building a balanced macro SAM which is consistent with 2004 national account data. Subsequently, the macro SAM is disaggregated into a micro SAM which is balanced in several steps.
  • Thumbnail Image
    Publication
    Factor mobility and heterogeneous labour in computable general equilibrium modelling
    (2014) Flaig, Dorothee; Grethe, Harald
    The representation of labour markets in Computable General Equilibrium (CGE) models is characterised by a trade-off between data representation and data availability. Models are by definition abstract and simplified pictures of the real world: as a map of scale 1:1 does not help to find an unknown destination, a model which perfectly depicts the real world would hardly help to analyse adjustment effects of policy changes or macroeconomic shocks. When the analysis is focused on distributional issues, it seems obvious that such an analysis can only be based on models that differentiate at least more than one household group. Household groups characteristically differ in factor endowment and since factor income– besides price effects – is a main determinant of welfare analysis, the specification of labour markets crucially determines the analysis. There are mainly two possibilities to specify the labour market in a CGE model: First, the labour market can be set up as competitive market with perfect substitutability between individual workers on that market. With this setup, wages must be equal among labour types and sectors because every difference in wages provokes adjustments, which finally equalise wages again. In contrast, data reports typically significant wage differences between labour types that can only originate from imperfect labour markets. Thus, the second option is to depict these wage differences by imperfect substitutability of individual workers in the production process. But data on substitution possibilities of labour demand between different labour types is weak and estimations of substitution elasticities are in most of the cases not available. Meanwhile, in the real world, wages differ in various dimensions and in models labour types are typically differentiated by age, gender, skill level or occupation. When differentiating labour types within these dimensions, wage differences become possible and can be explained by transformation limitations between characteristics: e.g., wage differences between female and male workers are originating from the fact that female workers cannot become male workers. This differentiation has the effect that in most of the models, transformation between the characteristics of a dimension is no longer possible and workers stay in a specific labour type. Typically labour types are not differentiated by sector of employment and, thus, are assumed homogeneous amongst sectors. Movement of workers between sectors seems possible; nevertheless, data reports partly huge wage differences between different sectors of an economy. As a solution, CGE models typically include an efficiency parameter which allows calibrating the model according to the data, but the model assumes still homogeneous labour which should be priced equal. Thus, the efficiency parameter does not economically explain the existence of these wage differences. This thesis presents a comprehensive and flexible framework to introduce imperfect factor markets in CGE models. Labour mobility between labour types is controlled by migration functions where the degree of mobility is controlled by elasticities that govern the responsiveness of migration to changes in relative wages. Finally, the model provides the user with three additional instruments to control the operation of labour markets. First, the user can control the stock flow relationship for each labour type, e.g., does a migrating worker keep her productivity from the initial activity, adopt that of the destination activity or something in between; second, the user controls the flexibility of the labour market by setting the migration elasticities between activity blocks; and third, the setting of adjustment parameters determines the (assumed) costs of migrating. The analysis of productivity effects and costs of factor reallocation emphasises the relevance and influence of labour market specifications on model outcomes. Thus, this thesis sets the base for a careful setup and test of labour market assumptions applied in CGE models.