The Costs of Dualism

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The Costs of Dualism

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Jonathan Temple ()

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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.

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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 02/532.

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Length: 34 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:bri:uobdis:02/532

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Paper
- Temple, Jonathan, 2003. "The costs of dualism," Royal Economic Society Annual Conference 2003 201, Royal Economic Society. [Downloadable!]

Find related papers by JEL classification:
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-DEV-2003-09-24 (Development)
NEP-GEO-2003-09-24 (Economic Geography)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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. [Downloadable!] (restricted)
Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257. [Downloadable!] (restricted)
Other versions:
- Bourguignon, F. & Morrisson, C., 1995. "Inequality and Development: The Role of Dualism," DELTA Working Papers 95-32, DELTA (Ecole normale supérieure).
Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January. [Downloadable!] (restricted)
Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February. [Downloadable!] (restricted)
Jeremiah. Allen, 2001. "The State of the Art in Modeling Migration in the LDCS: A Comment," Journal of Regional Science, Blackwell Publishing, vol. 41(3), pages 521-528. [Downloadable!] (restricted)
Klump, Rainer & Preissler, Harald, 2000. " CES Production Functions and Economic Growth," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(1), pages 41-56, March. [Downloadable!] (restricted)
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. [Downloadable!] (restricted)
MacLeod, W Bentley & Malcomson, James M, 1998. "Motivation and Markets," American Economic Review, American Economic Association, vol. 88(3), pages 388-411, June. [Downloadable!] (restricted)
Other versions:
- W. Bentley MacLeod & James Malcomson, 1997. "Motivation and Markets," Boston College Working Papers in Economics 339., Boston College Department of Economics. [Downloadable!]
- MacLeod, W.B. & Malcomson, J.M., 1997. "Motivation and Markets," Discussion Paper Series In Economics And Econometrics 9720, Economics Division, School of Social Sciences, University of Southampton.
Freeman, Richard B, 1993. "Labor Markets and Institutions in Economic Development," American Economic Review, American Economic Association, vol. 83(2), pages 403-08, May. [Downloadable!] (restricted)
Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S87-104, August. [Downloadable!] (restricted)
Basu, Kaushik C, 1980. "Optimal Policies in Dual Economies," The Quarterly Journal of Economics, MIT Press, vol. 95(1), pages 187-96, August. [Downloadable!] (restricted)
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(02), pages 413-425, June. [Downloadable!]
Albert Fishlow & Paul A. David, 1961. "Optimal Resource Allocation in an Imperfect Market Setting," Journal of Political Economy, University of Chicago Press, vol. 69, pages 529. [Downloadable!] (restricted)
Fields, Gary S., 1997. "Wage floors and unemployment: A two-sector analysis," Labour Economics, Elsevier, vol. 4(1), pages 85-91, March. [Downloadable!] (restricted)
Moene, Karl Ove, 1988. "A reformulation of the Harris-Todaro mechanism with endogenous wages," Economics Letters, Elsevier, vol. 27(4), pages 387-390. [Downloadable!] (restricted)
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 437-59, May-June. [Downloadable!] (restricted)
de Melo, Jaime A P, 1977. "Distortions in the Factor Market: Some General Equilibrium Estimates," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 398-405, November. [Downloadable!] (restricted)
Graham, Bryan S. & Jonathan Temple, 2002. "Rich Nations, Poor Nations: How much can multiple equilibria explain?," Royal Economic Society Annual Conference 2002 91, Royal Economic Society. [Downloadable!]
Other versions:
- Graham, Bryan S & Temple, Jonathan, 2001. "Rich Nations, Poor Nations: How Much can Multiple Equilibria Explain?," CEPR Discussion Papers 3046, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Bryan S. Graham & Jonathan R. W. Temple, 2004. "Rich nations, poor nations: how much can multiple equilibria explain?," The Institute for International Integration Studies Discussion Paper Series iiisdp017, IIIS. [Downloadable!]
- 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, 03. [Downloadable!] (restricted)
Charles A. Ingene, 2001. "The State of the Art in Modeling Migration in LDCS: A Comment," Journal of Regional Science, Blackwell Publishing, vol. 41(3), pages 529-543. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," Macroeconomics 0305002, EconWPA. [Downloadable!]
Other versions:
- Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," EPRU Working Paper Series 03-09, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
- Areendam Chanda & Carl-Johan Dalgaard, . "Dual Economies and International Total Factor Productivity Differences," Departmental Working Papers 2005-11, Department of Economics, Louisiana State University. [Downloadable!]
- Areendam Chanda & Carl-Johan Dalgaard, 2005. "Dual Economies and International Total Factory Productivity Differences," Macroeconomics 0507003, EconWPA. [Downloadable!]

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