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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. 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.
    3. Krishna, Raj, 1973. "Presidential Address: Unemployment in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 28(1), January.
    4. 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.
    5. Krishna, Raj, 1973. "Presidential Address- Unemployment in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 28(1), pages 1-24.
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    Cited by:

    1. 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.
    2. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, vol. 39(3), pages 450-473, March.
    3. 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.

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    Keywords

    Labor and Human Capital;

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