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Growth and Wage Inequality in a Dual Economy

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  • Jonathan R. W. Temple

Abstract

Who benefits from economic growth? This paper analyses the distributional impact of different types of growth within a two-sector model. The paper first presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then applied to the Harris-Todaro model with an urban non-agricultural sector and rural agriculture. It is shown that capital accumulation or technical progress in agriculture can shift the Lorenz curve inwards and reduce wage inequality, while the effects of development in non-agriculture are typically ambiguous. Copyright Blackwell Publishers Ltd and the Board of Trustees of the Bulletin of Economic Research, 2005.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Bulletin of Economic Research.

Volume (Year): 57 (2005)
Issue (Month): 2 (04)
Pages: 145-169

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Handle: RePEc:bla:buecrs:v:57:y:2005:i:2:p:145-169

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Cited by:
  1. Takeuchi, Nobuyuki, 2012. "Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences," MPRA Paper 39378, University Library of Munich, Germany.
  2. Epo, Boniface Ngah & Baye, Francis Menjo, 2013. "Implications of Farm–Non-farm Population Shifts for Household Poverty Changes in Cameroon," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(2), August.
  3. Huikang Ying, 2014. "Growth and Structural Change in a Dynamic Lagakos-Waugh Model," Bristol Economics Discussion Papers 14/639, Department of Economics, University of Bristol, UK.
  4. Grabowski, Richard, 2009. "An alternative Indian model?," Journal of Asian Economics, Elsevier, vol. 20(1), pages 50-61, January.

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