Impact of Global Economic Crisis on the Employment and Migrant ...

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CfxCF(4.5)Then, the cost distribution ratio or the demand equation for each factor <strong>of</strong> production is yieldedas the equation (4.6).1Si, si,s ijln xj,sWhere zirepresents other variables i.e. dummy variable before and after economic crisis in1997, the ratio <strong>of</strong> the high education to the lower one, the number <strong>of</strong> migrant workers.The aggregate <strong>of</strong> material inputs is obtained with a Leontief technology.Where(4.6)dY iiP(4.7)Yi= Domestic sales <strong>of</strong> composite commodity,PDij = sales prices <strong>of</strong> compositecommodity. The quantity <strong>of</strong> aggregate intermediate input per activities unit. The firms mustmaximize its pr<strong>of</strong>it and must choose to sell in the domestic or the foreign market. Thetransformation function exhibits in the constant elasticity <strong>of</strong> transformation in (4.8).WherediYdiaTiTiEiY = supply <strong>of</strong> domestic output <strong>of</strong> firms,t1dd t( 1 ) YTiT i(4.8)iddYi= quantity <strong>of</strong> aggregate value added or thedomestic output <strong>of</strong> firms, Ei= quantity <strong>of</strong> aggregate intermediate input. aT= shift parameter inithe CET function <strong>of</strong> firm. Assume the constant return to scale (homogeneity), thereforeTi11Ti(4.9)Yddi(1Ti)T iPddiT iTiT iPE1T i(1Ti) PDD1Ti1T iTiY(adiTi)dT11i E T iT i E T iDD Ti 1 Y iTiEiPiP (1 ) P ( )(4.10)TiTiTiaT iTiWhereddYi= Domestic production delivered to the home market(includes the transportation),ddPi= Price <strong>of</strong> domestic production delivered to the home market quantity <strong>of</strong> aggregate valueadded or the domestic output <strong>of</strong> firms,Price <strong>of</strong> product exported.T= elasticity <strong>of</strong> transformation.iEi= quantity <strong>of</strong> aggregate intermediate input, andArmington assumption, the firm produces a composite commodity using the domesticcommodity supplied to the domestic market and imports <strong>of</strong> this commodity, is shown in theequation 4.10. The firm must minimize its total cost <strong>of</strong> the domestic commodity and importgoods ( M ).iEPi=
Subject toGivenMiDDiDDiTCiP MiP Y(4.11)XiaAiAiMiAi1iDDiAi( 1AiA) X(4.12)iA is the elasticity <strong>of</strong> Armingtion functioniA iM11AiAi AiM AiAiAiDD Ai 1 XiM ( 1 )Aii AP( )iAPi iAPii(4.13)aA iDDDD11AiAi AiM AiAiAiDD Ai 1 XiX i ( 1 )(1 )AiAP( )iAPi iAPiiaAi (4.14)DDiWhere X = Domestic production delivered to the home market(includes the transportation),P = Price <strong>of</strong> domestic production delivered to the home market quantity <strong>of</strong> aggregate valueDDiadded or the domestic output <strong>of</strong> firms,MP= the import price.AiMi= the import delivered to the home market, and theNote that the public commodities produced by the transportation sector, tourism sector, andthe public utility are assume to be non-cross border trade. Even some public utilities, especiallythe power generator, are produced and trade among the neighboring countries, the presentamount as the GDP ratio is small enough to neglect. Therefore, there is no decision making toexports. On the other hand, for sector not importing from the other economies, total supply isequals total domestic sales.4.2 Demand for Goods and Services <strong>of</strong> HouseholdThe household receives income from primary factors' remuneration, transfers from thegovernment and from the rest <strong>of</strong> the world. A fix portion <strong>of</strong> its income is used to pay incometaxes to the government and its savings are a linear function <strong>of</strong> its disposable income.On the other hand, the household’s money income from capital, labour unemployment benefit,transfer funds from government ( TR ) for training and educational subsidies and the transferfrom the rest <strong>of</strong> the world ( TR ) and other transfers ( TR ).FGDH KLY P K P LS UNE)( TR ER TR TR(4.15)GFDHWhere Y represents the household’s income. LS is the total labour supply . Given saving isa fixed fraction <strong>of</strong> net money income. ER = exchange rate.The model assumes that the preferences <strong>of</strong> the representative household are represented by aStone-Geary utility function (or Linear Expenditure System). Each household maximize itsutility subject to his budget.
Page 3 and 4: Employment to population ratio, 15+
Page 5 and 6: into formal employment. This is sup
Page 7 and 8: workers. To capture all above affec
Page 9 and 10: The following section defines the i
Page 11 and 12: job seekers with high education pre
Page 13 and 14: Figure 4.1 Framework of</st
Page 15 and 16: political conflict and economic sta
Page 17 and 18: The informal workers who work infor
Page 19 and 20: (2) Low skillThe migrants compose <
Page 21: Note: * There are some foreign work
Page 25 and 26: 4.4 Labour marketLabour is measured
Page 27 and 28: PP1L0LP1INDEXP0INDEXUNE1 11 phillip
Page 29 and 30: However, the migrant worker within

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