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Essays on Labour Supply and Growth: with Emphasis on Skills and Input-Output Linkages

Nogueira, Veridiana A (2021) Essays on Labour Supply and Growth: with Emphasis on Skills and Input-Output Linkages. PhD thesis, University of Essex.

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Abstract

The first chapter incorporates imperfect substitution between two human-capital types and skill-specific technology to Bils and Klenow's (2000) model. Their model relies on the assumptions that (i) different types of workers are perfect substitutes, and (ii) technical changes are neutral. These premises contradict a vast literature showing that (i) the elasticity of substitution between skilled and unskilled workers is much less than infinity, and (ii) that recent technical changes have been favouring skilled rather than unskilled labour. The analysis of the chapter shows that altering the human capital specification leads to diverging conclusions regarding the effect of schooling on human capital and technology. The second chapter evaluates the impact of the A8 immigration into the UK on the output of its industries. An input-output general equilibrium model featuring three factors of production ---capital, low-skill and high-skill labour--- and industry-specific factor intensities is developed and calibrated for the country. I show that domestic commerce of intermediate inputs allows for a relay of the supply shock across industries. A model without this feature misestimates industrial output changes the most for industries more connected within the production network. The third chapter proposes an input-output model with international trade to evaluate the relevance of the production network in the effects on industry output of exogenous macroeconomic shocks. I compute the domestic connectivity of WIOD countries to select two distinct economies: one with a sparse production network ---Ireland--- and another with a dense one ---Korea. I calibrate the model for these countries and apply it to empirically assess the propagation of a labour supply shock and an import price shock through the economies. I find that ignoring input-output linkages results in misestimations of the industry output changes more than three times larger for the dense economy in comparison to the sparse one.

Item Type: Thesis (PhD)
Additional Information: All Stata and MATLAB codes used in the production of the thesis can be requested to the author via email.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Veridiana Nogueira
Date Deposited: 04 Oct 2021 15:14
Last Modified: 04 Oct 2021 15:14
URI: http://repository.essex.ac.uk/id/eprint/31206

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