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Recession in the skilled sector and implications for informal wage

  • Marjit, Sugata
  • Kar, Saibal
  • Chaudhuri, Sarbajit

Global financial crisis has affected the white goods, white collared sector in many developing countries. However, preponderance of large unorganized sectors in such countries must be factored in before one predicts its depth and severity for the entire economy. We postulate analytically that recession in the skilled sector may actually increase real informal wage and despite temporal contraction, countries with large informal sectors would not be deeply affected unlike economies with strict formal regulations. Numerical examples are constructed to capture the extent of changes in informal wage.

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Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 65 (2011)
Issue (Month): 3 (September)
Pages: 158-163

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Handle: RePEc:eee:reecon:v:65:y:2011:i:3:p:158-163
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622941

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  1. Dibyendu Maiti & Sugata Marjit, 2008. "Trade liberalization, production organization and informal sector of the developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(3), pages 453-461.
  2. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2005. "The Effects of the Colombian Trade Liberalization on Urban Poverty," NBER Working Papers 11081, National Bureau of Economic Research, Inc.
  3. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2007. "Economic liberalization, capital mobility and informal wage in a small open economy: A theoretical analysis," Economic Modelling, Elsevier, vol. 24(6), pages 924-940, November.
  4. Macias, Jose Brambila & Cazzavillan, Guido, 2009. "The dynamics of parallel economies. Measuring the informal sector in Mexico," Research in Economics, Elsevier, vol. 63(3), pages 189-199, September.
  5. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
  6. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  7. Funkhouser, Edward, 1997. "Demand-Side and Supply-Side Explanations for Barriers to Labor Market Mobility in Developing Countries: The Case of Guatemala," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 341-66, January.
  8. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2002. "Economic liberalization and welfare in a model with an informal sector," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 143-172, March.
  9. Sarbajit Chaudhuri, 2003. "How and how far to liberalize a developing economy with informal sector and factor market distortions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 403-428.
  10. Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
  11. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1, October.
  12. Kar, Saibal & Marjit, Sugata, 2009. "Urban informal sector and poverty," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 631-642, October.
  13. Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute for the Study of Labor (IZA).
  14. Marjit, Sugata & Kar, Saibal & Acharyya, Rajat, 2007. "Agricultural prospects and informal wage in general equilibrium," Economic Modelling, Elsevier, vol. 24(3), pages 380-385, May.
  15. Carruth, Alan A. & Oswald, Andrew J., 1981. "The determination of union and non-union wage rates," European Economic Review, Elsevier, vol. 16(2), pages 285-302.
  16. Funkhouser, Edward, 1997. "Mobility and Labor Market Segmentation: The Urban Labor Market in El Salvador," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 123-53, October.
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