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Welfare implications of technological progress with segmented factor markets

Listed author(s):
  • Mukherjee, Soumyatanu
  • Zafar, Sameen

Using a Heckscher-Ohlin-Samuelson type general equilibrium framework with segmented factor markets, we show that uniform technological progress in either the unorganized or the fixed wage organized sector can improve the real income of a small, open developing economy. However, uniform productivity improvement in the unorganized sector turns out to be relatively more egalitarian since it helps the marginalized informal workers in terms of wage-earnings and employment whereas productivity take-off in the organized sector hurts them.

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File URL: https://mpra.ub.uni-muenchen.de/58245/1/MPRA_paper_58245.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 58245.

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Date of creation: 30 Aug 2014
Handle: RePEc:pra:mprapa:58245
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  1. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
  2. Hamid Beladi & Sarbajit Chaudhuri & Shigemi Yabuuchi, 2008. "Can International Factor Mobility Reduce Wage Inequality in a Dual Economy?," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 893-903, November.
  3. Hamid Beladi & Lynda De la Vina & Sugata Marjit, 2012. "Technological Progress with Segmented Labor Markets," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 148-151, February.
  4. Basu, Kaushik & Bell, Clive, 1991. "Fragmented duopoly : Theory and applications to backward agriculture," Journal of Development Economics, Elsevier, vol. 36(2), pages 145-165, October.
  5. Bhaduri, Amit, 1977. "On the Formation of Usurious Interest Rates in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 1(4), pages 341-352, December.
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