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The Micro-Economics of "Surplus Labour"

  • Ranis, G.
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    This paper examines the apparent conflict between the classical assumption of a bargaining agricultural sector wage and the neo-classical assumption of a competitive wage in the context of a labour surplus developing economy. It concludes that the relatively inelastic supply of labour 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.

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    Paper provided by Yale - Economic Growth Center in its series Papers with number 772.

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    Length: 17 pages
    Date of creation: 1997
    Date of revision:
    Handle: RePEc:fth:yalegr:772
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