A Model of the Informal Sector in Development
AbstractIn discussions of economic development, industrial dualism is often ignored. Industry, or the modern sector, in developing countries is composed of an overregulated formal sector and a free-entry informal sector. Because of the nature of the regulations we can, in general, identify the formal sector with large industry and the informal sector with small industry. The informal modern sector is often a dynamic actor in the process of economic development, frequently outpacing the growth of the formal modern sector. We investigate in a general equilibrium model the conditions under which the informal sector increases its capital stock more rapidly than the formal sector. We also look at the employment-unemployment effects of industrial dualism.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Journal of Economic Studies.
Volume (Year): 17 (1990)
Issue (Month): 5 (December)
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- Suguta Marjit & Saibal Kar, 2007. "The Urban Informal Sector and Poverty: Effects of Trade Reform and Capital Mobility in India," Working Papers MPIA 2007-09, PEP-MPIA.
- Saracoglu, Durdane Sirin, 2008. "The informal sector and tax on employment: A dynamic general equilibrium investigation," Journal of Economic Dynamics and Control, Elsevier, vol. 32(2), pages 529-549, February.
- Ira N. Gang & Myeong-Su Yun, 2006. "Immigration Amnesty and Immigrant's Earnings," Departmental Working Papers 200632, Rutgers University, Department of Economics.
- Saracoglu, Durdane Sirin, 2003. "On The Size And The Evolution Of The Informal Sector In Developing Countries: The Case Of Turkey," 2003 Annual meeting, July 27-30, Montreal, Canada 22211, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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