Alternatively, if estimates of aggregate supply<sup>elasticitiesareavailable,then these may be</sup> used to estimate the impact of price reforms<sup>on the output of affectedsectors.By its</sup> nature this approach will not take into account<sup>generalequilibriumeffects,but if the</sup> reforms do not affect too many sectors simultaneously<sup>then this may providean adequate</sup> approximation of the output change.

Estimating the impact of the change in output<sup>upon employmentand wages canbe</sup> addressed in a number of ways without<sup>resorting to a CGE analysis.If the sector of</sup> employment is indicated in the household<sup>survey, then it is possiblesimply toscale</sup> employment up or down by the sectoral<sup>growth rate(if oneis assuming aninfinite</sup> elasticity of labour supply) or to scale wages<sup>up or down for existingemployees (if one is</sup> assuming that the labour supply elasticity<sup>is zero).</sup> If it is reasonable to assume excess capacity<sup>and unemployment so that exogenous</sup> changes can be satisfied through an increase<sup>in outputwithout having any effecton</sup> prices, then a slightly more theoretically<sup>defensible approach is given by Niimi,</sup> Vasudeva-Dutta and Winters (2002). They<sup>attempt to estimatethe employmentimpact of</sup> the growth in exports and imports in Vietnam<sup>between1993and1998using the Vietnam</sup> Input-Output matrix. They simply calculate<sup>labour coefficientsfor each sector(in terms</sup> of jobs per $ of output) by dividing the<sup>total labour cost in each sector by the value of</sup> gross output (to give labour cost per<sup>$)and then dividingby the average wage.' 7Using</sup> this approach one can simulate the employment<sup>impact of any assumed sectoralgrowth</sup> rate by simply-multiplying the change<sup>inoutput by thelabour coefficientfor the sector.</sup> For example Niimi, Vasudeva-Dutta and<sup>Winters (2002)multiply the labourcoefficient</sup> for each tradable sector by the change in<sup>exportstocalculatethe additionemployment</sup> created by the expansion of exports. Similarly<sup>the employment"destroyed"by the</sup> expansion of imports was calculated by<sup>multiplyingthe labourcoefficientsby the changes</sup> in imports. This approach provides a<sup>lower bound of the employment changesresulting</sup> from growth."<sup>8</sup> Simply using the labour coefficients from<sup>the 1-0 matrix assumes that there areno</sup> second-round expenditure effects associated<sup>with the demandfor intermediates (or that</sup> all intermediates are imported). Where the<sup>productionof intermediateinputs isan</sup> important part of the local economy<sup>onemay wish instead touse "totallabour</sup> coefficients" which take into account<sup>the effectof growthon the demandfor</sup> intermediates (see Niimi, Vasudeva-Dutta<sup>and Winters,2002).19This providesan upper</sup> bound of the employment changes. Of<sup>course thelower and upper boundsare rather</sup> crude approximations to the employment<sup>changes,but the advantageof this approachis</sup> that it only requires an Input-Output<sup>matrix (and preferablyinformationaboutsectoral</sup> wage rates).

> **17** Ideally the average sectoral wage should be<sup>used,butin their case thiswasunavailable.</sup> 18 Assuming no changes in wages.

> **9** This is similar to the technique of using<sup>SocialAccounting Matrix (SAM) multipliersto simulatethe</sup> impact of exogenous income shocks upon different<sup>householdgroups -see Decaluwe,Patry, Savard and</sup> Thorbecke (1999) for an excellent exposition.

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