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Recession in the Skilled Sector and Implications for Informal Wage

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  • Marjit, Sugata
  • Chaudhuri, Sarbajit
  • Kar, Saibal

Abstract

Global recession is likely to hit the skilled sector or the so-called white goods, white collared sector in a typical developing economy. In this paper we try to analyze the impact of such an event on informal wage as the vast majority of the workforce in the developing world is employed in the unorganized or informal sector. In particular, we demonstrate the analytical possibility that a recession in the skilled sector will actually increase real informal wage.

Suggested Citation

  • Marjit, Sugata & Chaudhuri, Sarbajit & Kar, Saibal, 2009. "Recession in the Skilled Sector and Implications for Informal Wage," MPRA Paper 18003, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18003
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    References listed on IDEAS

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    2. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "The Effects of the Colombian Trade Liberalization on Urban Poverty," NBER Chapters, in: Globalization and Poverty, pages 241-290, National Bureau of Economic Research, Inc.
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    9. Marjit, Sugata & Kar, Saibal & Acharyya, Rajat, 2007. "Agricultural prospects and informal wage in general equilibrium," Economic Modelling, Elsevier, vol. 24(3), pages 380-385, May.
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    13. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2002. "Economic liberalization and welfare in a model with an informal sector," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 143-172.
    14. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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    Citations

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    Cited by:

    1. Soumyatanu Mukherjee, 2015. "Input Trade Liberalisation and Wage-inequality with Non-traded Goods," Discussion Papers 2015-05, University of Nottingham, CREDIT.
    2. Soumyatanu Mukherjee, 2016. "Opening the Pandora's Box – Liberalised Input Trade and Wage Inequality with Non-traded Goods and Segmented Unskilled Labour Markets," Discussion Papers 2016-15, University of Nottingham, GEP.
    3. Mandal, Biswajit & Chaudhuri, Saswati, 2010. "Informal Wage, Informal Price and Extortion under Migration and Tariff Reform," MPRA Paper 28704, University Library of Munich, Germany.
    4. Mukherjee, Soumyatanu & Zafar, Sameen, 2014. "Technological progress with segmented factor markets and welfare implications for the urban poor," MPRA Paper 55297, University Library of Munich, Germany.
    5. Mukherjee, Soumyatanu, 2017. "Input trade reform and wage inequality," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 145-156.
    6. Mukherjee, Soumyatanu, 2016. "Technology, trade and ‘urban poor’ in a general equilibrium model with segmented domestic factor markets," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 400-416.
    7. Sushobhan Mahata & Rohan Kanti Khan & Ranjanendra Narayan Nag, 2020. "Economic Recession, Informal Sector and Skilled–Unskilled Wage Disparity in a Developing Economy: A Trade-Theoretical Analysis," Foreign Trade Review, , vol. 55(2), pages 168-188, May.
    8. Biswajit Mandal, 2016. "Recessionary Shock, Capital Mobility and the Informal Sector," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 149-162, March.
    9. Soumyatanu Mukherjee & Thasni T, 2019. "Corruption And Real Wages In General Equilibrium Trade Models," Working papers 348, Indian Institute of Management Kozhikode.
    10. Beladi, Hamid & Mandal, Biswajit, 2011. "Recessionary shock and factor return in an underemployed economy," MPRA Paper 33733, University Library of Munich, Germany.
    11. Chaudhuri, Sarbajit, 2010. "Economic recession, demand constraint and labour markets in a developing economy," MPRA Paper 27433, University Library of Munich, Germany.
    12. Mandal, Biswajit, 2009. "Would Recession Induce More Intermediation in the Corrupt Informal Sector?," MPRA Paper 19930, University Library of Munich, Germany, revised 10 Jan 2010.

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    More about this item

    Keywords

    Recession; skill; capital-labor ratio; informal wage; general equilibrium;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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