Recessionary shock, capital mobility and the informal sector
Using the hybrid of Heckscher - Ohlin and Specific Factor models of trade we show that economic recession led shock results in a loss for both capitalists and skilled workers. Some of the unionized unskilled workers lose formal sector employment and move onto the informal sector. In case capital moves from formal to the informal, informal employment and wage both can go up in the informal segment. If capital does not move informal employment expands and wage drops. Thus recession may actually benefit a large number of informal workers.
|Date of creation:||Aug 2010|
|Date of revision:||Jan 2011|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beladi, Hamid & Yabuuchi, Shigemi, 2001. "Tariff-induced capital inflow and welfare in the presence of unemployment and informal sector," Japan and the World Economy, Elsevier, vol. 13(1), pages 51-60, January.
- Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
- Chaudhuri, Sarbajit, 2009. "Economic Recession and Informal Sector Workers," MPRA Paper 18033, University Library of Munich, Germany.
- Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
- Marjit, Sugata & Kar, Saibal & Chaudhuri, Sarbajit, 2011.
"Recession in the skilled sector and implications for informal wage,"
Research in Economics,
Elsevier, vol. 65(3), pages 158-163, September.
- 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.
- Ronald Jones & Sugata Marjit, 2009. "Competitive trade models and real world features," Economic Theory, Springer, vol. 41(1), pages 163-174, October.
- Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557.
- Beladi, Hamid & Chao, Chi-Chur, 1993. "Non-traded goods, urban unemployment and welfare in LDCs," European Journal of Political Economy, Elsevier, vol. 9(2), pages 281-292, May.
- Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33736. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.