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Trade, Capital Accumulation, and Structural Unemployment: An Empirical Study of the Singapore Economy

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dc.contributor.authorLooi Kee, Hiau
dc.contributor.authorTeck Hoon, Hian
dc.date.accessioned2013-06-21T15:40:52Z
dc.date.available2013-06-21T15:40:52Z
dc.date.issued2004-04
dc.description.abstractThe past three and a half decades witnessed a distinctly declining trend in Singapore's unemployment rate, which dropped from an average annual rate of 7.85 percent in 1966-70 to 2.74 percent in 1991-2000. The authors seek to identify and empirically examine the factors that have influenced Singapore's unemployment rate in an environment of low and stable inflation. They incorporate a union bargaining framework into a standard-factors trade model, in which an increase in the relative price or capital stock in the export sector raises the demand wage that firms can afford to pay relative to workers' fall-back income, and consequently lowers equilibrium unemployment. The magnitude of the effects depends on the fall-back income, the weight unions attach to employment, and the elasticity of labor demand, which the authors estimate using data on Singapore. The results show that labor unions in Singapore care more about employment than wages. Together with a small fall-back income and elastic labor demand, the authors show that given the same percentage change in relative export prices and capital accumulation in the export sector, the effect on unemployment is larger for the former. However, the empirical importance of capital accumulation in the export sector dominates increases in relative export prices in reducing unemployment since the manufacturing sector experienced a tremendous increase in capital inputs throughout the sample period, whereas the relative price of exports experienced a far smaller increase and only in the early part of the sample period. The authors conclude that through a very open trading regime, the tremendous increase in capital stock of the exporting sector has been the main reason behind Singapore's declining unemployment rate.en
dc.identifierhttp://documents.worldbank.org/curated/en/2004/04/4132786/trade-capital-accumulation-structural-unemployment-empirical-study-singapore-economy
dc.identifier.doi10.1596/1813-9450-3272
dc.identifier.urihttps://hdl.handle.net/10986/14110
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, D.C.
dc.relation.ispartofseriesPolicy Research Working Paper;No.3272
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAVERAGE ANNUAL GROWTH
dc.subjectBASE YEAR
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL FORMATION
dc.subjectCAPITAL GOODS
dc.subjectCAPITAL INPUT
dc.subjectCAPITAL INVESTMENT
dc.subjectCAPITAL STOCK
dc.subjectCAPITAL-LABOR
dc.subjectCAPITAL-LABOR RATIO
dc.subjectCONSTANT RETURNS
dc.subjectCONSTANT RETURNS TO SCALE
dc.subjectDEFLATORS
dc.subjectDEMAND CURVE
dc.subjectDEMAND CURVES
dc.subjectDEMAND ELASTICITY
dc.subjectDISINFLATION
dc.subjectECONOMICS RESEARCH
dc.subjectECONOMISTS
dc.subjectELASTICITY
dc.subjectEMPLOYMENT MODELS
dc.subjectENDOGENOUS VARIABLES
dc.subjectEQUILIBRIUM
dc.subjectEQUILIBRIUM MODELS
dc.subjectEQUILIBRIUM RETURN
dc.subjectEXOGENOUS VARIABLES
dc.subjectEXPORTS
dc.subjectFACTOR RETURNS
dc.subjectFACTOR REWARDS
dc.subjectFACTORS OF PRODUCTION
dc.subjectFIRST YEAR
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectFULL EMPLOYMENT
dc.subjectFUTURE RESEARCH
dc.subjectGDP
dc.subjectGDP DEFLATOR
dc.subjectGROSS INVESTMENT
dc.subjectGROWTH RATE
dc.subjectGROWTH RATES
dc.subjectHOUSING
dc.subjectINCOME
dc.subjectINCREASE IN CAPITAL
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectINFLATION RATES
dc.subjectINSURANCE
dc.subjectINTERMEDIATE INPUTS
dc.subjectINTERNATIONAL TRADE
dc.subjectINVENTORY
dc.subjectLABOR DEMAND
dc.subjectLABOR FORCE
dc.subjectLABOR MARKET
dc.subjectLABOR MOBILITY
dc.subjectLABOR STATISTICS
dc.subjectLABOR SUPPLY
dc.subjectLABOR UNIONS
dc.subjectLIQUIDITY
dc.subjectMARGINAL PRODUCT
dc.subjectMARGINAL PRODUCTIVITY
dc.subjectMARKET OUTCOMES
dc.subjectMINIMUM WAGE
dc.subjectNATURAL RATE HYPOTHESIS
dc.subjectNATURAL RATE OF UNEMPLOYMENT
dc.subjectNEOCLASSICAL ASSUMPTIONS
dc.subjectOPTIMIZATION
dc.subjectPENSIONS
dc.subjectPERFECT COMPETITION
dc.subjectPHILLIPS CURVE
dc.subjectPRICE ELASTICITY
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPUBLIC HOUSING
dc.subjectRANDOM WALK
dc.subjectREAL INCOME
dc.subjectREAL WAGE
dc.subjectRETIREMENT
dc.subjectSAVINGS
dc.subjectSTRUCTURAL UNEMPLOYMENT
dc.subjectSUBSIDIARIES
dc.subjectSUPPLY CURVE
dc.subjectTOTAL CAPITAL STOCK
dc.subjectTOTAL LABOR FORCE
dc.subjectTRADE UNIONS
dc.subjectTRANSPORT
dc.subjectUNEMPLOYED
dc.subjectUNEMPLOYED WORKER
dc.subjectUNEMPLOYMENT
dc.subjectUNEMPLOYMENT BENEFITS
dc.subjectUNEMPLOYMENT COMPENSATION
dc.subjectUNEMPLOYMENT RATE
dc.subjectUPWARD SHIFT
dc.subjectUTILITY FUNCTION
dc.subjectWAGES
dc.subjectWEALTH TRADE
dc.subjectUNEMPLOYMENT RATE
dc.subjectINFLATION & UNEMPLOYMENT
dc.subjectTRADE UNIONS
dc.subjectEXPORT PRICES
dc.subjectINCOME
dc.subjectWAGES
dc.subjectLABOR DEMAND
dc.subjectTRADING SYSTEMS
dc.subjectCAPITAL
dc.subjectINCOME
dc.titleTrade, Capital Accumulation, and Structural Unemployment: An Empirical Study of the Singapore Economyen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crossref.titleTrade, Capital Accumulation, and Structural Unemployment: An Empirical Study of the Singapore Economy
okr.date.doiregistration2025-04-10T10:48:55.615101Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2004/04/4132786/trade-capital-accumulation-structural-unemployment-empirical-study-singapore-economy
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeSocial Protection and Labor
okr.globalpracticeFinance and Markets
okr.guid747041468776053105
okr.identifier.doi10.1596/1813-9450-3272
okr.identifier.externaldocumentum000009486_20040610162635
okr.identifier.internaldocumentum4132786
okr.identifier.reportWPS3272
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/06/10/000009486_20040610162635/Rendered/PDF/wps3272singapore.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countrySingapore
okr.topicEconomic Theory and Research
okr.topicBanks and Banking Reform
okr.topicEnvironmental Economics and Policies
okr.topicSocial Protections and Labor::Labor Policies
okr.topicSocial Protections and Labor::Labor Markets
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicFinance and Financial Sector Development
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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