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The Micro-Economics of "Surplus Labor"

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  • Ranis, Gustav

Abstract

This paper examines the apparent conflict between the classical assumption of a bargaining the context of a labor surplus developing economy. It concludes that the relatively inelastic supply of labor hours offered by low income small or landless farmers in the static microeconomic leisure/work context is perfectly consistent with the persistence for some time of an institutional real wage offered to the non-agricultural sector of the dual economy. Empirical evidence is brought to bear in support of that position.

Suggested Citation

  • Ranis, Gustav, 1997. "The Micro-Economics of "Surplus Labor"," Center Discussion Papers 28499, Yale University, Economic Growth Center.
    • Handle: RePEc:ags:yaleeg:28499
    DOI: 10.22004/ag.econ.28499
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    References listed on IDEAS

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    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. Krishna, Raj, 1973. "Presidential Address- Unemployment in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 28(1), pages 1-24.
    3. Hanson, James A, 1971. "Employment and Rural Wages in Egypt: A Reinterpretation," American Economic Review, American Economic Association, vol. 61(3), pages 492-499, June.
    4. Krishna, Raj, 1973. "Presidential Address: Unemployment in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 28(1), January.
    5. Lau, Lawrence J & Lin, Wuu-Long & Yotopoulos, Pan A, 1978. "The Linear Logarithmic Expenditure System: An Application to Consumption-Leisure Choice," Econometrica, Econometric Society, vol. 46(4), pages 843-868, July.
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    Cited by:

    1. Ernoiz Antriyandarti, 2017. "Impact of Surplus Labor Existence on Land Lease Market in Rural Central Java," GATR Journals jber133, Global Academy of Training and Research (GATR) Enterprise.
    2. Boggio, Luciano, 2009. "Long-run effects of low-wage countries' growing competitiveness and exports of manufactures," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 38-49, March.
    3. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, vol. 39(3), pages 450-473, March.

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    Keywords

    Labor and Human Capital;

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