In absence of empirical estimation of the labour

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In absence of empirical estimation of the labour force participation in the countries of our interest, we assume that p i = 0 for i < 14 and i > 64 . What would be the effect of the EVD on the average experience level of the labour force? In the case of EVD, the productivity of a labourer is taken to be a quadratic function of work experience. In the case of the EVD, the productivity of an individual who has contracted the disease will be low. Indeed, with the high death rate of the disease, the productivity of anyone who died from the EVD will be zero, while for survivors, the productivity will be low and there is no guarantee of a return to work. In this case, ρ i = ρ i + ρ 2 ( i –15) + ρ 3 ( i –15) 2 (10) with ρ 1 = 0.8, ρ 2 = 0.02 and ρ 3 = -0.0002 The production function. The formal sector production function at time t is represented by a simple Cobb-Douglas technology function: Y Ft = α F γ F t E Ft βF K F t 1 –βF (11) Where: F denotes the formal sector, t the time period, α represents a constant scale factor that will be adjusted to calibrate the model in the first year (2000), γ t is the change in technology over time, β is the output elasticity of the labour factor, i.e. the labour share of national output, SOCIO-ECONOMIC IMPACT OF EBOLA VIRUS DISEASE IN WEST AFRICAN COUNTRIES
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90 E F is the labour demand measured in efficiency units, K F is the capital demand measured in efficiency units. E Ft = ∑ i=1 64 ρ i (1– za it ) L Fit (12) Where: a it is the proportion of the labour force age i with the EVD at time t , L Fit is the number of workers of age i at time t in the formal sector, z is the fraction of an Ebola patient’s work years lost due to the disease. With the characteristics of the EVD, it is natural to assume that z=1 since, unlike the HIV/AIDS, anybody with the EVD may not be able to resume work. Labour demand. For simplification, it is assumed that no firm discriminates with respect to age or potential EVD status. Indeed, anyone who knows they have the EVD will not apply for a job since the disease progresses rapidly. There is then no need to discriminate against the EVD. Hence, the production function can be rewritten as: Y Ft = α F γ F t ( ρ t L Ft ) βF K Ft 1–βF ) (13) The efficiency unit of labour at time t equals a cohort-weighted average of EVD exclusive productivity factors. ρ t = 64 i=15 ρ i (1– za it ) (14) It has to be noted that the labour efficiency factor (14) will change over time and as the composition of the labour force and the EVD prevalence rate change. Both a rise in a it and the shift in the labour force contribute to the decline in labour efficiency over time. Each year, since the firm knows the unit price of labour (wt), it chooses the number of labour units to hire to maximize its profit. Hence, the labour demand will depend on the prevailing real wage and the existing capital stock. L Ft = ϕ Ft K Ft . (15) Where: ϕ Ft = [ F γ Ft β F ρ Ft β F wt ] 1 ( 1– βF ) It has to be noted that, given the wage and capital stock, an increase of the EVD prevalence reduces labour productivity. The output supply function for the formal sector is determined in the usual way by substituting labour demand from (15) into the production function (13).
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