IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v21y1988i3p617-24.html
   My bibliography  Save this article

Informationally Imperfect Labour Markets and the 'Dutch Disease' Problem

Author

Listed:
  • Haideh Salehi-Esfahani

Abstract

This paper analyzes the "Dutch Disease" as a phenomenon arising from incomplete information in the labor markets of resource-exporting countries. Imperfect observation of labor quality in the manufacturing (traded) sector leads to the pa yment of an efficiency wage in this sector which exceeds the opportun ity cost of low-quality workers. The presence of such an imperfection in a resource-exporting economy is an externality that calls for gov ernment intervention in the form of wage subsidy to the manufacturing sector. It is also shown that in the event of an oil boom, the optim al wage subsidy should be unambiguously increased to prevent perverse effects due to deindustrialization.

Suggested Citation

  • Haideh Salehi-Esfahani, 1988. "Informationally Imperfect Labour Markets and the 'Dutch Disease' Problem," Canadian Journal of Economics, Canadian Economics Association, vol. 21(3), pages 617-624, August.
  • Handle: RePEc:cje:issued:v:21:y:1988:i:3:p:617-24
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0008-4085%28198808%2921%3A3%3C617%3AIILMAT%3E2.0.CO%3B2-5
    Download Restriction: only available to JSTOR subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robin Boadway & Neil Bruce & Jack Mintz, 1984. "Taxation, Inflation, and the Effective Marginal Tax Rate on Capital in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 17(1), pages 62-79, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Fielding & Fred Gibson, 2013. "Aid and Dutch Disease in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(1), pages 1-21, January.
    2. World Bank, 2007. "An Assessment of the Investment Climate in Botswana, Volume 2. Detailed Results and Econometric Analysis," World Bank Other Operational Studies 7747, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:21:y:1988:i:3:p:617-24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: http://edirc.repec.org/data/ceaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.