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The Micro-Economics of 'Surplus Labor

Author

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  • Gustav Ranis

    (Economic Growth Center, Yale University)

Abstract

This paper examines the apparent conflict between the classical assumption of a bargaining agricultural sector wage and the neoclassical assumption of a competitive wage in the context of a labor surplus developing economy. It concludes that the relatively inelastic supply of labor hours offered by low income small or landless farmers in the static micro-economic leisure/work context is perfectly consistent with the persistence for some time of an institutional real wage offered to the non-agricultural sector of the dual economy. Empirical evidence is brought to bear in support of that position.

Suggested Citation

  • Gustav Ranis, 1997. "The Micro-Economics of 'Surplus Labor," Working Papers 772, Economic Growth Center, Yale University.
    • Handle: RePEc:egc:wpaper:772
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    File URL: http://www.econ.yale.edu/growth_pdf/cdp772.pdf
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    References listed on IDEAS

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    1. Rosenzweig, Mark R., 1988. "Labor markets in low-income countries," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 15, pages 713-762, Elsevier.
    2. Barnum, Howard N. & Squire, Lyn, 1979. "An econometric application of the theory of the farm-household," Journal of Development Economics, Elsevier, vol. 6(1), pages 79-102, February.
    3. Strauss, John, 1982. "Determinants of food consumption in rural Sierra Leone : Application of the quadratic expenditure system to the consumption-leisure component of a household-firm model," Journal of Development Economics, Elsevier, vol. 11(3), pages 327-353, December.
    4. Hanson, James A, 1971. "Employment and Rural Wages in Egypt: A Reinterpretation," American Economic Review, American Economic Association, vol. 61(3), pages 492-499, June.
    5. Hansen, Bent, 1969. "Employment and Wages in Rural Egypt," American Economic Review, American Economic Association, vol. 59(3), pages 298-313, June.
    6. Lau, Lawrence J & Lin, Wuu-Long & Yotopoulos, Pan A, 1978. "The Linear Logarithmic Expenditure System: An Application to Consumption-Leisure Choice," Econometrica, Econometric Society, vol. 46(4), pages 843-868, July.
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    2. Ernoiz Antriyandarti, 2017. "Impact of Surplus Labor Existence on Land Lease Market in Rural Central Java," GATR Journals jber133, Global Academy of Training and Research (GATR) Enterprise.

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