Chun-Yan Kuo

Special Issue

Evaluating the Social Cost of Job Creation


This article discusses the principal labor market distortions and their effects on the social cost of jobs created in industrial projects. Two alternative approaches, a partial and a general equilibrium analysis, are put forth as ways to measure labor's opportunity cost in a systematic fashion. The general equilbrium approach provides a more sophisticated analysis because it takes into account labor migration between regions and the multiplier effect of job-creation projects on the project region.