@article{Terra:331318,
      recid = {331318},
      author = {Terra, Maria Ines and Bucheli, Marisa and Laens, Silvia  and Estrades, Carmen},
      title = {The Effects of Increasing Openness and Integration to the  MERCOSUR on the Uruguayan Labour Market: A CGE Modeling  Analysis},
      address = {2005},
      pages = {48},
      year = {2005},
      note = {Presented at the 9th Annual Conference on Global Economic  Analysis, Addis Ababa, Ethiopia},
      abstract = {Uruguay is a small economy. Its integration to MERCOSUR  has increased the exposure to regional macroeconomic  instability. The aim of this paper is to assess the impact  of regional integration on the country’s labour market and  poverty. We estimated wage differentials between labour  categories, finding a 60 percent wage gap between formal  and informal workers. A CGE model with an efficiency wage  specification for unskilled labour was built, with results  showing that regional shocks deeply affect the Uruguayan  economy. The consideration of an efficiency wage model is  particularly important when shocks lead to a reallocation  of resources towards sectors intensive in unskilled labour.  A subsidy on formal, unskilled labour could contribute to  decrease informality and therefore increase GDP, but this  type of policy needs to be carefully implemented because it  may have negative effects on investment. Finally, the  effects on poverty and income distribution obtained through  microsimulations are consistent with the results of the CGE  experiments.},
      url = {http://ageconsearch.umn.edu/record/331318},
}