School is work; work is school Paul Romer Sept. 26, 2011.

School is work; work is school

Paul Romer Sept. 26, 2011

Cost per student

Enrollment

Schooling

Wage

Employment

D - Demand for labor

Competitive Industry

- Cyclical vs. structural?

- Policy responses?

Stipulate

Cost of employment matters

Claim

www.cde.org.za

Singapore’s use of wage subsidies

Prof Hian Teck HoonSingapore Management University

Cyclical?

Wage

Employment

D - Demand for labor

Competitive Industry

Wage

Employment

D

Resource rents, restrictions on

firing

W W

MiningE1

D

Garments

Zero Elasticity

W W

MiningE1

D

Zero Elasticity

Garments

W W

MiningE1 E2

D

Infinite elasticity

Garments

“South African policy advisers were also keen to find an alternative to the perceived ‘low wage’ industrial strategy of fast-growing Asian economies.”

- Andrew Donaldson

Relative urbanization

W

Better infrastructure =>

higher wages

Manufacturing Exports

E2

Income net of transport costs

}Worker’s Transport cost

Manufacturing Exports

... and higher real income

Relative inclusion

W W

MiningE1 E2

S2S2 }Gov’t

}Firms

Manufacturing Exports

Universal wage subsidy

W

MiningE1 E2

S3

Wage floor in garments

Manufacturing Exports

Targeted Wage Subsidy

Cost of employment matters

Claim

Cost of employment matters

Claim

“ILO, UNDP JOIN FORCES TO PROMOTE GROWTH FOR DECENT

JOBS”

Relative inclusion