As a city state and an export-oriented economy, Singapore constantly experiences labour shortages. Although Singapore government tackles this problem by an encouraging migrant worker policy, labour constraint imposes a serious threat to the sustainable growth of the Singapore economy. This study employs the updated Singaporean input-output tables and a Computable General Equilibrium (CGE) model to gauge the long-run effects of a negative shock in labour supply as well as selected three policy responses. The simulation results suggest the effectiveness of all proposed reactions: while an increase in capital and a change in economic structure largely offset the negative effect of labour supply shock, an increase in technological efficiency induces sizeable economic growth.
|Keywords:||CGE Modelling, Labour Supply, Technological Efficiency, Singaporean Economy|
PhD Student, School of Business, Economics and Public Policy, University of New England, Armidale, NSW, Australia
Professor in Economics, School of Business, Economics and Public Policy, University of New England, Armidale, NSW, Australia
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