IDEAS home Printed from https://ideas.repec.org/a/jed/journl/v25y2000i1p111-126.html
   My bibliography  Save this article

Factor Market Dualism, Small Scale Industry and Labor Absorption

Author

Listed:
  • Jaleel Ahmad

    (Concordia University)

Abstract

This paper takes a closer look at the dualistic nature of labor and credit markets in developing countries in so far as their functioning is relevant for labor absorption in small scale industry. The potential for absorption of excess labor from the ¡°informal¡± urban market in the small scale industry is assessed within the framework of a modified ¡°specific factors¡± model. The paper concludes that segmentation in labor and credit markets in developing countries is asymmetric in its implications for labor absorption in small scale industry. While the high cost of capital and its unavailability to small scale industry is a serious constraint, the availability of a pool of unemployed labor in the urban informal labor market, and at a significantly lower wage, offers an unexploited opportunity. However, this is conditional on a policy regime that shifts domestic demand towards the output of small scale industry.

Suggested Citation

  • Jaleel Ahmad, 2000. "Factor Market Dualism, Small Scale Industry and Labor Absorption," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(1), pages 111-126, June.
    • Handle: RePEc:jed:journl:v:25:y:2000:i:1:p:111-126
    as

    Download full text from publisher

    File URL: http://www.jed.or.kr/full-text/25-1/ahmad.PDF
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rosenzweig, Mark R., 1988. "Labor markets in low-income countries," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 15, pages 713-762, Elsevier.
    2. Bell, Clive, 1988. "Credit markets and interlinked transactions," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 16, pages 763-830, Elsevier.
    3. Joseph E. Stiglitz, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC's: The Labor Turnover Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(2), pages 194-227.
    4. Mazumdar, Dipak, 1976. "The urban informal sector," World Development, Elsevier, vol. 4(8), pages 655-679, August.
    5. Yap, Lorene Y. L., 1976. "Rural-urban migration and urban underemployment in Brazil," Journal of Development Economics, Elsevier, vol. 3(3), pages 227-243, September.
    6. Tybout, James R, 1983. "Credit Rationing and Investment Behavior in a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 598-607, November.
    7. Yap, Lorene Y. L., 1977. "The attraction of cities : A review of the migration literature," Journal of Development Economics, Elsevier, vol. 4(3), pages 239-264, September.
    8. Gregory, Peter, 1980. "An Assessment of Changes in Employment Conditions in Less Developed Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 28(4), pages 673-700, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2859-2939 is not listed on IDEAS
    2. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, School of Economics, University of Bristol, UK.
    3. Jain, Varinder, 2020. "Vulnerability Exposure in Informal Manufacturing Sector A Reflection on Conceptual and Analytical Issues," MPRA Paper 103158, University Library of Munich, Germany.
    4. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    5. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    6. Yamauchi, Futoshi, 2003. "Are experience and schooling complementary?," FCND briefs 166, International Food Policy Research Institute (IFPRI).
    7. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    8. Busso, Matias & Chauvin, Juan Pablo & Herrera L., Nicolás, 2021. "Rural-urban migration at high urbanization levels," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    9. Ku, Hyejin, 2019. "The effect of wage subsidies on piece rate workers: Evidence from the Penny Per Pound program in Florida," Journal of Development Economics, Elsevier, vol. 139(C), pages 122-134.
    10. Michael Grimm & Isabel Günther, 2005. "Inter- and Intra-household Linkages Between the Informal and Formal Sector: a Case Study for Urban Burkina Faso," WIDER Working Paper Series RP2005-14, World Institute for Development Economic Research (UNU-WIDER).
    11. Harold Lubell, 1984. "Third World Urbanization and International Assistance," Urban Studies, Urban Studies Journal Limited, vol. 21(1), pages 1-13, February.
    12. Fields,Gary S., 2005. "A guide to multisector labor market models," Social Protection and Labor Policy and Technical Notes 32547, The World Bank.
    13. Dietrich Vollrath, 2009. "The dual economy in long-run development," Journal of Economic Growth, Springer, vol. 14(4), pages 287-312, December.
    14. Carlos Humberto Ortiz & José Ignacio Uribe & Érika Raquel Badillo, 2009. "Segmentación inter e intrarregional en el mercado laboral urbano de Colombia, 2001-2006," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 27(58), pages 194-231, August.
    15. Ranis, Gustav, 2012. "Labor Surplus Revisited," Center Discussion Papers 133411, Yale University, Economic Growth Center.
    16. Yamauchi, Futoshi, 2004. "Are experience and schooling complementary? Evidence from migrants' assimilation in the Bangkok labor market," Journal of Development Economics, Elsevier, vol. 74(2), pages 489-513, August.
    17. Rosenzweig, Mark R., 1987. "Labor Markets in Low Income Countries: Distortions, Mobility and Migration," Bulletins 7506, University of Minnesota, Economic Development Center.
    18. Ruth Dixon, 1983. "Land, Labour, and the Sex Composition of the Agricultural Labour Force: An International Comparison," Development and Change, International Institute of Social Studies, vol. 14(3), pages 347-372, July.
    19. Aysit Tansel, 2001. "Wage Earners, Self Employed and Gender in the Informal Sector in Turkey," Working Papers 0102, Economic Research Forum, revised 01 Nov 2001.
    20. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    21. Jeremy T. Fox, 2010. "Estimating the Employer Switching Costs and Wage Responses of Forward-Looking Engineers," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 357-412, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:25:y:2000:i:1:p:111-126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sung Y. Park (email available below). General contact details of provider: https://edirc.repec.org/data/eccaukr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.