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The Costs of Dualism

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  • Jonathan Temple

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Abstract

This paper shows how to calibrate a two-sector general equilibrium model of production using a small number of parameter assumptions and readily available data. The framework is then used to analyze the costs of labor market dualism. The paper quantiÞes the effects of rural-urban wage differentials and urban unemployment on total output, wages and returns to capital, factor shares, and sectoral structure. One of the main Þndings is that labor market rigidities can have a major impact on the extent of industrialization.

Suggested Citation

  • Jonathan Temple, 2002. "The Costs of Dualism," Bristol Economics Discussion Papers 02/532, Department of Economics, University of Bristol, UK.
  • Handle: RePEc:bri:uobdis:02/532
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    References listed on IDEAS

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    Cited by:

    1. Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," Macroeconomics 0305002, EconWPA.

    More about this item

    Keywords

    dualism; productivity; wage differentials; minimum wages;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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