The Effects of Transaction Costs on Labor Market Participation and Earnings: Evidence From Rural Philippine Markets
Ateneo De Manila University - Economics Department
Robert E. Evenson
Yale University - Economic Growth Center
Yale Economic Growth Center Disc. Paper No. 790
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.
Number of Pages in PDF File: 26
JEL Classification: J22, J31working papers series
Date posted: October 18, 1998
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