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Capital Mobility and Informal Wage in a Small Economy—Two Examples

Author

Listed:
  • Sugata Marjit

    (Centre for Studies in Social Sciences, Calcutta, smarjit@hotmail.com)

  • Saibal Kar

    (Centre for Studies in Social Sciences, Calcutta. R 1, B.P. Township, Kolkata 700 094, saibal@cssscal.org)

  • Punyabrata Sarkar

    (Calcutta Metropolitan Development Authority, Kolkata, punyabratasarkar@hotmail.com)

Abstract

We conduct two policy experiments in a general equilibrium framework with an informal sector. The first deals with a liberal trade policy and the second with a decline in the unionized wage rate. In both cases, informal workers gain if capital moves between the formal and the informal segments and lose if it does not. These results are independent of the factor intensity rankings of the sectors. Both of these results have important policy implications.

Suggested Citation

  • Sugata Marjit & Saibal Kar & Punyabrata Sarkar, 2004. "Capital Mobility and Informal Wage in a Small Economy—Two Examples," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 5(2), pages 261-266, September.
    • Handle: RePEc:sae:soueco:v:5:y:2004:i:2:p:261-266
    DOI: 10.1177/139156140400500204
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    References listed on IDEAS

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    1. Kar, Saibal & Marjit, Sugata, 2001. "Informal sector in general equilibrium: welfare effects of trade policy reforms," International Review of Economics & Finance, Elsevier, vol. 10(3), pages 289-300, July.
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    Cited by:

    1. Mitra, Sudeshna & Gupta, Kausik, 2017. "Liberalization and Welfare Conditions of a Developing Economy: A General Equilibrium Analysis," MPRA Paper 85230, University Library of Munich, Germany.
    2. Eckhard Siggel, 2010. "The Indian informal sector: The impact of globalization and reform," International Labour Review, International Labour Organization, vol. 149(1), pages 93-105, March.
    3. Sugata Marjit & Dibyendu S. Maiti, 2005. "Globalization, Reform and the Informal Sector," WIDER Working Paper Series RP2005-12, World Institute for Development Economic Research (UNU-WIDER).

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