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China, South Africa and the Lewis Model

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  • John Knight

Abstract

The paper uses the Lewis model as a framework for examining the labour market progress of two labour-abundant countries, China and South Africa, towards labour shortage and generally rising labour real incomes. In the acuteness of their rural-urban divides, forms of migrant labour, rapid rural-urban migration, and high and rising real wages in the formal sector, the two economies are surprisingly similar. They differ, however, in the dynamism of their formal sector growth of output and employment, and in the growth of their labour forces. Whereas China - a labour-surplus economy par excellence despite unemployment until recently taking only a disguised form - is moving rapidly in the direction of labour scarcity, South Africa - which historically has been short of labour - is moving towards increased labour surplus in the form of open unemployment. The paper draws on research previously conducted by the author in separate research projects on the two countries.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2007-12.

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Date of creation: 01 Jun 2007
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Handle: RePEc:oxf:wpaper:wps/2007-12

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Keywords: China; South Africa; Lewis Model; Wages; Labour Supply; Rural-Urban Migration; Unemployment;

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References

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  1. Geeta Kingdon & John Knight, 2005. "How Flexible are Wages in Response to Local Unemployment in South Africa?," Economics Series Working Papers GPRG-WPS-015, University of Oxford, Department of Economics.
  2. Geeta Kingdon & John Knight, 2005. "Unemployment in South Africa, 1995-2003: Causes, Problems and Policies," Economics Series Working Papers GPRG-WPS-010, University of Oxford, Department of Economics.
  3. John Knight & Jinjun Xue, 2006. "How High is Urban Unemployment in China?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 4(2), pages 91-107.
  4. Kingdon, Geeta & Knight, John, 2006. "The measurement of unemployment when unemployment is high," Labour Economics, Elsevier, Elsevier, vol. 13(3), pages 291-315, June.
  5. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198293309, October.
  6. Geeta Kingdon & John Knight, 2001. "Unemployment in South Africa: the nature of the beast," Economics Series Working Papers WPS/2001-15, University of Oxford, Department of Economics.
  7. Knight, J B & Lenta, G, 1980. "Has Capitalism Underdeveloped the Labour Reserves of South Africa?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 42(3), pages 157-201, August.
  8. Knight, John & Song, Lina, 2006. "Towards a Labour Market in China," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199215553, October.
  9. Knight, John & Li, Shi, 2005. "Wages, firm profitability and labor market segmentation in urban China," China Economic Review, Elsevier, Elsevier, vol. 16(3), pages 205-228.
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Cited by:
  1. Marco G. Ercolani & Zheng Wei, 2010. "An Empirical Analysis of the Lewis-Ranis-FEi Theory of Dualistic Economic Development for China," Discussion Papers, Department of Economics, University of Birmingham 10-06, Department of Economics, University of Birmingham.
  2. Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2011. "China has reached the Lewis turning point," China Economic Review, Elsevier, Elsevier, vol. 22(4), pages 542-554.

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