IDEAS home Printed from https://ideas.repec.org/p/qed/dpaper/4585.html
   My bibliography  Save this paper

Estimation of the Economic Opportunity Cost of Labor: An Operational guide for Ghana

Author

Listed:
  • Abdallah Othman

    (Cambridge Resources International Inc.)

  • Mikhail Miklyaev

    (Department of Economics, Queens University, Kingston, Ontario, Canada, K7L3N6 and Cambridge Resources International Inc.)

  • Glenn P. Jenkins

    (Department of Economics, Queens University, Kingston, Ontario, Canada, K7L3N6 and Cambridge Resources International Inc.)

Abstract

This report employs the supply price approach to the estimation of the economic opportunity cost of labor (EOCL) for a number of labor market situations in Ghana. This is applied as an instrument for the economic evaluation of public projects to be implemented. The relevant literature refers to the significant heterogeneity of labor, which leads to a consideration of different types of labor. Accordingly, the EOCL will vary by skill, location, and labor market conditions, and these factors need to be incorporated in its estimation. In this analysis, the estimation has been carried out to quantify the EOCL and the conversion factor corresponding to the two types of labor: skilled and unskilled. Furthermore, these estimates refer to groups of labor according to areas of residence (urban/rural).

Suggested Citation

  • Abdallah Othman & Mikhail Miklyaev & Glenn P. Jenkins, 2022. "Estimation of the Economic Opportunity Cost of Labor: An Operational guide for Ghana," Development Discussion Papers 2022-07, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4585
    as

    Download full text from publisher

    File URL: http://cri-world.com/publications/qed_dp_4585.pdf
    Download Restriction: no
    File URL: http://cri-world.com/publications/qed_dp_4585.xls
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Glenn Jenkins, 1995. "Economic Opportunity Cost Of Labour: A Synthesis," Development Discussion Papers 1995-02, JDI Executive Programs.
    2. Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.
    3. Alan B. Krueger & Andreas Mueller, 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," Working Papers 1295, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Greenberg, David H. & Robins, Philip K., 2008. "Incorporating nonmarket time into benefit-cost analyses of social programs: An application to the self-sufficiency project," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 766-794, April.
    5. Hasan Ali Biçak & Glenn P. Jenkins & Chun-Yan Kuo & M Benjamin Mphahlele, 2004. "An Operational Guide to The Estimation Of The Economic Opportunity Cost Of Labour In South Africa," Development Discussion Papers 2004-08, JDI Executive Programs.
    6. Nxumalo, Mpumelelo Author-Name: Raju, Dhushyanth, "undated". "Structural Transformation and Labor Market Performance in Ghana," Jobs Group Papers, Notes, and Guides 154568, The World Bank.
    7. Jenkins, Glenn P & Montmarquette, Claude, 1979. "Estimating the Private and Social Opportunity Cost of Displaced Workers," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 342-353, August.
    8. Hasan Ali Bicak & Glenn P Jenkins & Chun‐Yan Kuo & M Benjamin Mphahlele, 2004. "An Operational Guide To The Estimation Of The Economic Opportunity Cost Of Labour In South Africa1," South African Journal of Economics, Economic Society of South Africa, vol. 72(5), pages 1057-1068, December.
    9. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    10. Mike Brewer & Marco Francesconi & Paul Gregg & Jeffrey Grogger, 2009. "Feature: In-work Benefit Reform in a Cross-National Perspective - Introduction," Economic Journal, Royal Economic Society, vol. 119(535), pages 1-14, February.
    11. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    12. repec:pri:cepsud:215krueger is not listed on IDEAS
    13. Michaud, Pierre-Carl & Vencatachellum, Desire, 2003. "Human Capital Externalities in South Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 51(3), pages 603-628, April.
    14. Alan B. Krueger & Andreas Mueller, 2011. "Job Search, Emotional Well-Being and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 1-81.
    15. Otoo, Kwabena Nyarko, 2019. "Informality and Labour Regulations in Ghana," Books, Rainer Hampp Verlag, number 9783957102522.
    16. Krueger, Alan B. & Mueller, Andreas I., 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," IZA Discussion Papers 5450, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simon Franklin, 2015. "Location, search costs and youth unemployment: A randomized trial of transport subsidies in Ethiopia," CSAE Working Paper Series 2015-11, Centre for the Study of African Economies, University of Oxford.
    2. Kyle Herkenhoff & Lee Ohanian, 2019. "The Impact of Foreclosure Delay on U.S. Employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 63-83, January.
    3. Lídia Farré & Francesco Fasani & Hannes Mueller, 2018. "Feeling useless: the effect of unemployment on mental health in the Great Recession," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-34, December.
    4. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.
    5. Robert E. Hall & Sam Schulhofer-Wohl, 2018. "Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Job-Seekers," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 1-32, January.
    6. Michaillat, Pascal & Saez, Emmanuel, 2019. "Beveridgean Unemployment Gap," CEPR Discussion Papers 14132, C.E.P.R. Discussion Papers.
    7. Stefania Albanesi & Aysegul Sahin, 2018. "The Gender Unemployment Gap," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 47-67, October.
    8. Anne C. Gielen & Jan C. Ours, 2014. "Unhappiness and Job Finding," Economica, London School of Economics and Political Science, vol. 81(323), pages 544-565, July.
    9. Xiongtao Dai & Zhenhua Lin & Hans‐Georg Müller, 2021. "Modeling sparse longitudinal data on Riemannian manifolds," Biometrics, The International Biometric Society, vol. 77(4), pages 1328-1341, December.
    10. Marianna Kudlyak & Damba Lkhagvasuren & Roman Susuyev, 2012. "Sorting by Skill over the Course of Job Search," Working Papers 12011, Concordia University, Department of Economics, revised 18 Apr 2012.
    11. R. Jason Faberman & Marianna Kudlyak, 2019. "The Intensity of Job Search and Search Duration," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(3), pages 327-357, July.
    12. Jiwon Choi & Ilyana Kuziemko & Ebonya Washington & Gavin Wright, 2024. "Local Economic and Political Effects of Trade Deals: Evidence from NAFTA," American Economic Review, American Economic Association, vol. 114(6), pages 1540-1575, June.
    13. W. Similan Rujiwattanapong, 2019. "Unemployment Dynamics and Endogenous Unemployment Insurance Extensions," Discussion Papers 1909, Centre for Macroeconomics (CFM).
    14. Stefano Della & Jörg Heining & Johannes F Schmieder & Simon Trenkle, 2023. "Evidence on Job Search Models from a Survey of Unemployed Workers in Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(2), pages 1181-1232.
    15. Panos Sousounis & Gauthier Lanot, 2022. "Minimum Wage Effects on Reservation Wages," Journal of Labor Research, Springer, vol. 43(3), pages 415-439, December.
    16. Marinescu, Ioana, 2017. "The general equilibrium impacts of unemployment insurance: Evidence from a large online job board," Journal of Public Economics, Elsevier, vol. 150(C), pages 14-29.
    17. Jan Eeckhout & Ilse Lindenlaub, 2019. "Unemployment Cycles," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(4), pages 175-234, October.
    18. Camille Landais, 2015. "Assessing the Welfare Effects of Unemployment Benefits Using the Regression Kink Design," American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 243-278, November.
    19. Guiné, Raquel P. F. & Ferrão, Ana Cristina & Correia, Paula & Cardoso, Ana Paula & Ferreira, Manuela & Duarte, João, 2019. "Influence Of Emotional Determinants On The Food Choices Of The Portuguese," EUREKA: Social and Humanities, Scientific Route OÜ, issue 5, pages 31-44.
    20. Bermingham, Colin & Coates, Dermot & Larkin, John & O'Brien, Derry & O'Reilly, Gerard, 2012. "Explaining Irish Inflation During the Financial Crisis," Research Technical Papers 09/RT/12, Central Bank of Ireland.

    More about this item

    Keywords

    Economic Cost; Labor; Supply Price; Protected Wage; Investment Appraisal;
    All these keywords.

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:dpaper:4585. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.