Labour market, international trade, and unemployment in a less developed country
AbstractThis paper constructs a trade general equilibrium model for a less developed country with three sectors. One is the informal and un-tradable sector characterized by flexible wages, while the other two sectors are tradable, export and import sectors. The model imposes a binding minimum wage over the unskilled labour and efficient wage distortions on the skilled labour. Comparative statics is driven to analyze the effects on the labour market as consequence of opening the economy, raising the minimum wage and the introduction of an augmenting productivity in the export sector.
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Bibliographic InfoPaper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 008908.
Date of creation: 23 Aug 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-05 (All new papers)
- NEP-INT-2011-09-05 (International Trade)
- NEP-IUE-2011-09-05 (Informal & Underground Economics)
- NEP-LAB-2011-09-05 (Labour Economics)
- NEP-LMA-2011-09-05 (Labor Markets - Supply, Demand, & Wages)
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