The aim of this work is to analyse the general equilibrium effects of terms of trade shocks in exportable sectors under particular assumptions about labour market. The model used is based on the Blacke et al. (1995) model of the Mauritian economy, modelled as consisting of three productive...

The ratio of skill to unskilled labour stocks in the economy is widely acknowledged to have an important role for development. Can education policy affect the evolution of this ratio? This paper shows that it can, and it also shows that the actual effect of education policy depends on the...

In Uruguay, similar to many developing countries, the economic return to lower secondary studies is low. When heterogeneity is introduced in the analysis, it can be shown that differences in the quality of education and in the probability of repetition mark the contrast between an attractive and...

The paper discusses the links between skill requirements in the labour market and trade patterns using a CGE applied on the SAM 2005 for Uruguay. The results for alternative scenarios in the long term show that, the wage gap would widen should the pattern of trade growth follow the current trend;...

Changes in technology and markets result in the transformation of economic structure: When labor is quasi-fixed due to short-term specificity, changing conditions may imply either temporary unemployment or the need of retraining to enable mobility across the sectors. There is an economy-wide...

Standard trade theory suggests that trade liberalization produces opposite effects on human capital accumulation in developed and developing countries, reducing the incentives to invest in education in skill-scarce countries. How would conventional wisdom be modified if we introduce public...

The evidence of effects of education activities on growth is mixed. So, could education be good, neutral, or bad, depending on the case? While the model in this paper remains close to the Heckscher-Ohlin tradition, it is shown that, contrary to the standard results, it is the net effect of...

Are early leavers from the education system irrational or ill informed? They might be, but this approach shows that with underperforming education sectors – typical in developing countries – early dropout may be perfectly rational and well informed, even in the absence of liquidity...