IDEAS home Printed from https://ideas.repec.org/p/bri/uobdis/02-532.html
   My bibliography  Save this paper

The Costs of Dualism

Author

Listed:
  • Jonathan Temple

Abstract

This paper shows how to calibrate a two-sector general equilibrium model of production using a small number of parameter assumptions and readily available data. The framework is then used to analyze the costs of labor market dualism. The paper quantiÞes the effects of rural-urban wage differentials and urban unemployment on total output, wages and returns to capital, factor shares, and sectoral structure. One of the main Þndings is that labor market rigidities can have a major impact on the extent of industrialization.

Suggested Citation

  • Jonathan Temple, 2002. "The Costs of Dualism," Bristol Economics Discussion Papers 02/532, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:02/532
    as

    Download full text from publisher

    File URL: http://www.bristol.ac.uk/efm/media/workingpapers/working_papers/pdffiles/dp02532.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    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. Bryan Graham & Jonathan Temple, 2006. "Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?," Journal of Economic Growth, Springer, vol. 11(1), pages 5-41, March.
    3. Bhagwati, Jagdish N & Srinivasan, T N, 1974. "On Reanalyzing the Harris-Todaro Model: Policy Rankings in the Case of Sector-Specific Sticky Wages," American Economic Review, American Economic Association, vol. 64(3), pages 502-508, June.
    4. Khan, M. Ali & Naqvi, Syed Nawab Haider, 1983. "Capital markets and urban unemployment," Journal of International Economics, Elsevier, vol. 15(3-4), pages 367-385, November.
    5. Todaro, Michael P, 1969. "A Model for Labor Migration and Urban Unemployment in Less Developed Countries," American Economic Review, American Economic Association, vol. 59(1), pages 138-148, March.
    6. Yabuuchi, Shigemi, 1993. "Urban unemployment, international capital mobility and development policy," Journal of Development Economics, Elsevier, vol. 41(2), pages 399-403, August.
    7. Chao, Chi-Chur & Yu, Eden S. H., 1992. "Capital markets, urban unemployment and land," Journal of Development Economics, Elsevier, vol. 38(2), pages 407-413, April.
    8. Charles A. Ingene, 2001. "The State of the Art in Modeling Migration in LDCS: A Comment," Journal of Regional Science, Wiley Blackwell, vol. 41(3), pages 529-543, August.
    9. repec:bla:econom:v:42:y:1975:i:165:p:59-78 is not listed on IDEAS
    10. Rainer Klump & Harald Preissler, 2000. "CES Production Functions and Economic Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 41-56, March.
    11. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
    12. Albert Fishlow & Paul A. David, 1961. "Optimal Resource Allocation in an Imperfect Market Setting," Journal of Political Economy, University of Chicago Press, vol. 69(6), pages 529-529.
    13. Jeffrey G. Williamson, 1989. "The Constraints on Industrialisation: Some Lessons from the First Industrial Revolution," International Economic Association Series, in: Jeffrey G. Williamson & Vadiraj R. Panchamukhi (ed.), The Balance between Industry and Agriculture in Economic Development, chapter 4, pages 85-105, Palgrave Macmillan.
    14. Fields, Gary S., 1997. "Wage floors and unemployment: A two-sector analysis," Labour Economics, Elsevier, vol. 4(1), pages 85-91, March.
    15. Moene, Karl Ove, 1988. "A reformulation of the Harris-Todaro mechanism with endogenous wages," Economics Letters, Elsevier, vol. 27(4), pages 387-390.
    16. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-187, January.
    17. MacLeod, W Bentley & Malcomson, James M, 1998. "Motivation and Markets," American Economic Review, American Economic Association, vol. 88(3), pages 388-411, June.
    18. Freeman, Richard B, 1993. "Labor Markets and Institutions in Economic Development," American Economic Review, American Economic Association, vol. 83(2), pages 403-408, May.
    19. Williamson, Jeffrey G, 1987. "Did English Factor Markets Fail during the Industrial Revolution?," Oxford Economic Papers, Oxford University Press, vol. 39(4), pages 641-678, December.
    20. Hatton, Timothy J. & Williamson, Jeffrey G., 1991. "Integrated and Segmented Labor Markets: Thinking in Two Sectors," The Journal of Economic History, Cambridge University Press, vol. 51(2), pages 413-425, June.
    21. Jaime A. P. de Melo, 2015. "Distortions In The Factor Market: Some General Equilibrium Estimates," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 15, pages 349-356, World Scientific Publishing Co. Pte. Ltd..
    22. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    23. Magee, Stephen P, 1973. "Factor Market Distortions, Production, and Trade: A Survey," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 1-43, March.
    24. Jeremiah. Allen, 2001. "The State of the Art in Modeling Migration in the LDCS: A Comment," Journal of Regional Science, Wiley Blackwell, vol. 41(3), pages 521-528, August.
    25. Robinson, Sherman, 1989. "Multisectoral models," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 18, pages 885-947, Elsevier.
    26. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, April.
    27. Kaushik C. Basu, 1980. "Optimal Policies in Dual Economies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(1), pages 187-196.
    28. Jones, Ronald W, 1971. "Distortions in Factor Markets and the General Equilibrium Model of Production," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 437-459, May-June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," Macroeconomics 0305002, University Library of Munich, Germany.

    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. Jonathan Temple, 2005. "Dual Economy Models: A Primer For Growth Economists," Manchester School, University of Manchester, vol. 73(4), pages 435-478, July.
    2. Jonathan R. W. Temple, 2005. "Growth and Wage Inequality in a Dual Economy," Bulletin of Economic Research, Wiley Blackwell, vol. 57(2), pages 145-169, April.
    3. Jonathan Temple, 2002. "Wage Inequality in a Dual Economy," Bristol Economics Discussion Papers 02/531, School of Economics, University of Bristol, UK.
    4. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    5. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
    6. Marjit, Sugata & Beladi, Hamid, 2003. "Possibility or impossibility of paradoxes in the small country Harris-Todaro framework: a unifying analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 379-385, October.
    7. Lee, Chul-In, 2008. "Migration and the wage and unemployment gaps between urban and non-urban sectors: A dynamic general equilibrium reinterpretation of the Harris-Todaro equilibrium," Labour Economics, Elsevier, vol. 15(6), pages 1416-1434, December.
    8. Fields,Gary S., 2005. "A guide to multisector labor market models," Social Protection and Labor Policy and Technical Notes 32547, The World Bank.
    9. Ana Paula Martins, 2011. "Compliance with the Institutional Wage in Dualistic Models," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 54(2), pages 93-126.
    10. Ana Paula MARTINS, 2014. "The Mechanics of Dualistic Models: "Comparable" Structures and Comparative Statics Results," Journal of Economics and Political Economy, KSP Journals, vol. 1(2), pages 150-185, December.
    11. Martins, Ana Paula, 2008. "Bilateral mobility in dualistic models," Economic Modelling, Elsevier, vol. 25(3), pages 391-410, May.
    12. Andrés Rodríguez-Pose & Tobias Ketterer, 2015. "Do we follow the money? The drivers of migration across regions in the EU," REGION, European Regional Science Association, vol. 2, pages 27-45.
    13. Shigemi Yabuuchi, 1996. "Urban Unemployment And Development Policy: The Introduction Of An," Economics and Politics, Wiley Blackwell, vol. 8(3), pages 241-249, November.
    14. GUNNAR FLIoYSTAD, 1982. "Distortions in the Factor Market.Models and Realities," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 21(1), pages 19-48.
    15. Fields, Gary S., 2005. "A welfare economic analysis of labor market policies in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 76(1), pages 127-146, February.
    16. Huikang Ying, 2015. "Labour Informality, Selective Migration, and Productivity in General Equilibrium," Bristol Economics Discussion Papers 15/653, School of Economics, University of Bristol, UK.
    17. Khandker, A. Wahhab & Rashid, Salim, 1995. "Wage subsidy and full-employment in a dual economy with open unemployment and surplus labor," Journal of Development Economics, Elsevier, vol. 48(1), pages 205-223, October.
    18. Mohamed Amara & Hatem Jemmali, 2018. "Deciphering the Relationship Between Internal Migration and Regional Disparities in Tunisia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 313-331, January.
    19. Fidrmuc, Jan, 2001. "Migration and adjustment to shocks in transition economies," ZEI Working Papers B 23-2001, University of Bonn, ZEI - Center for European Integration Studies.
    20. Guy Stecklov & Calogero Carletto & Carlo Azzarri & Benjamin Davis, 2010. "Gender and migration from Albania," Demography, Springer;Population Association of America (PAA), vol. 47(4), pages 935-961, November.

    More about this item

    Keywords

    dualism; productivity; wage differentials; minimum wages;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bri:uobdis:02/532. 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: Vicky Jackson (email available below). General contact details of provider: https://edirc.repec.org/data/sebriuk.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.