How Does Immigration Affect Wages and the Unemployment Rate in Malaysia? A Computable General Equilibrium (CGE) Approach

Malaysia had approximately 2 million migrants in 2018, and this number was increasing dramatically by 25 percent in 2019. Parallels with the aims of country policy to reduce migrant workers' dependency in 2020, managing the workers needs to be clarified. At the same time, the country still needs to keep them for specific sectors. These issues motivate us to analyze the migrant worker's requirements at different levels of skills and wages. Using Computable General Equilibrium (CGE) modeling, at four-level nested CES production function, this study found high skilled migrants will harm wages for the high skilled and skilled groups while the opposite effect was observed for the semiskilled and low-skilled groups. However, when the migrant stock increases slightly below 1 percent, it will reduce the wages for semiskilled workers due to substitution effects. This study also found that the influx of low-skilled migrant workers will reduce salaries for semiskilled and low-skilled workers. The analysis also indicates that a small rise in high skilled immigrant labour will reduce the unemployment rate; likewise, increasing more than 4 percent will increase the unemployment rate. The results provide the policymaker guidelines to employ foreign workers' best skills to control the inequality of wages among skilled and low-skilled workers.

Double Dividend of the Carbon Tax in Japan: Can We Increase Public Support for Carbon Pricing?

Carbon pricing is difficult to introduce in many countries because it is not easy to obtain public support for carbon pricing due to the burden associated with it. One way to overcome this difficulty is to rely on the double dividend of a carbon tax. If a government uses revenue from a carbon tax to reduce existing distorting taxes, such as corporate taxes or labor taxes, a carbon tax can improve economic efficiency while reducing greenhouse gas (GHG) emissions. This chapter examines the net burden of a carbon tax with revenue recycling (RR) for two types of stakeholders: firms and households. Using dynamiccomputable general equilibrium (CGE) modeling, we examine the carbon prices needed to achieve the emission targets set for 2030 and 2050. Then, we simulate two types of RR: corporate tax reduction and a reduction in social security payments. We compare the benefit of the tax reduction to the increase in the burden from the carbon tax in scenarios for 2030/2050. In the scenario of corporate tax reduction, by selecting firms from the land transportation sector and power sector, we examine how profit changes due to the carbon tax. We find that the tax burden for a firm in the land transportation sector can be eased greatly with the corporate tax reduction. In the scenario of the social security payment reduction, we find that some households are better off under carbon pricing despite expenditure increases due to the carbon tax. Thus, we show that RR can increase support for the carbon tax.

Consumption-Savings Trade-Off in the Allocation of Migrants; Remittances and Economic Growth: The Cases of Burkina Faso and Senegal

The objective of this research is to assess the impact on growth of reallocating migrant remittances for savings/investment purposes. It focuses on two countries in the West African Economic and Monetary Union (WAEMU)' zone (Burkina Faso and Senegal). The methodological approach adopted is dynamic Computable General Equilibrium (CGE) modeling that integrates a procedure for reallocating remittances. Simulation results show that an increase in the propensity to save as a result of reallocation of remittances received by households for savings purposes leads to an increase in economic growth.