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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- Sarbajit Chaudhuri & Shigemi Yabuuchi, 2005.
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NBER Working Papers
9443, National Bureau of Economic Research, Inc.
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070808, University of California-Irvine, Department of Economics.
- 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.
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