Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy

Andriy Olegovych Shkurykhin, National Univesity of Kyiv-Mohyla Academy


Author's ORCID identifiers:


Abstract


In pursuit of creating the tool for policy analysis accounting for existence of Ukrainian shadow economy, the shadow untaxed labor market is integrated into the aggregated static Computable General Equilibrium model. The developed model is successfully calibrated to official statistical data and proven suitable for further analysis. The efficiency of the 2016 social security tax reform is assessed and proven to be more dependent on the preferences between the formal and informal labor of the factor owner than on the magnitude of the tax cut. The importance of the preferences of both the manufacturer and the consumer, being represented as the elasticities of transformation and substitution between the formal and the informal labor in the model, is discovered. Based on treating these elasticities as instrumental variables, policy recommendations are developed.

 


Keywords


shadow labor market; computable general equilibrium; elasticity of substitution; elasticity of transformation; social security tax.

Full Text:

PDF

References


Departament ekonomichnoi strategii ta makroekonomichnogo prognozuvannya. (2016, February 11). Tendentsii tinyovoi

ekonomiky Ukrainy u sichni-veresni 2015 roku [Ukrainian Shadow Economy Tendencies in January – September 2015]. Ministry of Economic Development and Trade. Retreived from: http://www.me.gov.ua/Documents/Download?id=5cee93d1-07dd-4d66-bd8b-98754ded9423.

Derzhavna sluzhba statystyky Ukrainy. (2016, January 19). Zvedeni natsionalni rahunky za III kvartal 2015 roku [Combined national accounts for the third quarter of 2015]. Retrieved from http://www.ukrstat.gov.ua/operativ/operativ2015/vvp/kvznr/kvznr_III_2015_u.zip.

Lukyanenko, I. G., & Semko, R. B. (2010). Osoblyvosti pobudovy dynamichnoi stohastychnoi modeli zagalnoi rivnovagy dlya analizu ekonomiky Ukrainy [Specifics of Creating the Dynamic Stochastic General Equilibrium Model for Analysis of Ukrainian Economy]. Economic Cybernetics, 4–6 (64–66), 48–59.

Lukyanenko, I. G., & Semko, R. B. (2012). Forecasting the Consequences of Economic Policy with General Equilibrium

Model. Actual Problems of Economics, 1, 303–319.

Markusen, J. (2002). General-Equilibrium Modeling using GAMS and MPS/GE: some basics. MPSGE. Retrieved from http://www.mpsge.org/tutorial.pdf.

Pavel, F., Burakovsky, I., Selitska, N., & Movchan, V. (2004). Economic Impact of Ukraine’s WTO Accession. First results from a Computable General Equilibrium Model. Kyiv: Institute for Economic Research and Policy Consulting.

Polonskii, G. (2009). Corruption and shadow economy: evidence from Ukraine and Russia. Kyiv: KSE, Unpublished master’s thesis.

Vynnychuk, I., & Ziukov, S. (2013). Shadow Economy in Ukraine: Modelling and Analysis. Business Systems and Economics, 3 (2), 141–152.


Citations

Cite this article in APA format:

Shkurykhin, A. (2016). Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy. Scientific Papers NaUKMA. Economics, 1(1), 172-176.

Cite this article in GOST format:

Shkurykhin Andriy. Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy // Scientific Papers NaUKMA. Economics. - 2016. - Vol. 1, N. 1. - P. 172-176.

Altmetrics

Refbacks

  • There are currently no refbacks.
ISSN: 2519-4747 (online); 2519-4739 (print)