Labour market, international trade, and unemployment in a less developed country
This paper constructs a trade general equilibrium model for a less developed country with three sectors. One is the informal and un-tradable sector characterized by flexible wages, while the other two sectors are tradable, export and import sectors. The model imposes a binding minimum wage over the unskilled labour and efficient wage distortions on the skilled labour. Comparative statics is driven to analyze the effects on the labour market as consequence of opening the economy, raising the minimum wage and the introduction of an augmenting productivity in the export sector.
|Date of creation:||23 Aug 2011|
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- Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003.
"The response of the informal sector to trade liberalization,"
Journal of Development Economics,
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- Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
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- Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2003.
"Trade, Wages and the Political Economy of Trade Protection: Evidence from the Colombian Trade Reforms,"
CEPR Discussion Papers
3877, C.E.P.R. Discussion Papers.
- Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2005. "Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms," Journal of International Economics, Elsevier, vol. 66(1), pages 75-105, May.
- Dutt, Pushan & Mitra, Devashish & Ranjan, Priya, 2009.
"International trade and unemployment: Theory and cross-national evidence,"
Journal of International Economics,
Elsevier, vol. 78(1), pages 32-44, June.
- Pushan Dutt & Devashish Mitra & Priya Ranjan, 2007. "International Trade and Unemployment: Theory and Cross-National Evidence," Working Papers 070808, University of California-Irvine, Department of Economics.
- Stiglitz, Joseph E, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC'S: The Labor Turnover Model," The Quarterly Journal of Economics, MIT Press, vol. 88(2), pages 194-227, May.
- Carl Davidson & Steven Matusz, 2005.
"Trade and Turnover: Theory and Evidence,"
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