Wage Inequality in a Dual Economy
This paper presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then used to analyze the distributional consequences of various types of economic growth. In particular, it is shown that capital accumulation or technical progress in agriculture is likely to reduce wage inequality, but the effects of development in non-agriculture are typically ambiguous. The paper also discusses the implications of this analysis for the Kuznets curve.
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