Labour market deregulation, crime and Papua New Guinea's severe drought

The prolonged drought in Papua New Guinea has crippled the rural sector with devastating consequences. One side effect of the drought is migration to urban centres, already overwhelmed by an enormous surplus labour problem and soaring crime rates. This paper investigates the ability of the urban labour market to cope with drought-induced rural-to-urban migration. In light of recent policy to deregulate a previously heavily regulated labour market, attention is given to assessing the relative merits of policy scenarios under these conditions. Quantitative evidence is reported using a computable general equilibrium model.