The Effects of Transaction Costs on Labor Market Participation and Earnings: Evidence from Rural Philippines Markets Report as inadecuate




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The paper aims to measure transaction costs and its effects on labor market participation and on wage earnings. The observed differences between buying and selling prices of rice across households are used to calculate transaction costs indices for villages which are incorporated into the standard labor market participation and Mincer wage equations. The estimates indicate that transaction costs may be a source of the income differentials between (a) the landed and the landless, (b) the rural and the urban areas, and (c) the males and the females. Furthermore, biases can be noted in the regression coefficients of estimates that do not control for transaction costs.

Keywords: transaction costs ; labor market participation ; Philippines

Subject(s): Labor and Human Capital

Issue Date: 1997

Publication Type: Working or Discussion Paper

PURL Identifier: http://purl.umn.edu/28465

Total Pages: 27

Series Statement: Center Discussion Paper No. 790

Record appears in: Yale University > Economic Growth Center > Center Discussion Papers





Author: Lanzona, Leonardo ; Evenson, Robert E.

Source: http://ageconsearch.umn.edu/record/28465?ln=en



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