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China, South Africa, and the Lewis Model

Author

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  • Knight, John

Abstract

The paper uses the Lewis model as a framework for examining the labour market progress of two labour-abundant countries, China and South Africa, towards labour shortage and generally rising labour real incomes. In the acuteness of their rural-urban divides, forms of migrant labour, rapid rural-urban migration, and high and rising real wages in the formal sector, the two economies are surprisingly similar. They differ, however, in the dynamism of their formal sector growth of output and employment, and in the growth of their labour forces. Whereas China ? a labour-surplus economy par excellence despite unemployment until recently taking only a disguised form ? is moving rapidly in the direction of labour scarcity, South Africa ? which historically has been short of labour ? is moving towards increased labour surplus in the form of open unemployment. The paper draws on research previously conducted by the author in separate research projects on the two countries.

Suggested Citation

  • Knight, John, 2007. "China, South Africa, and the Lewis Model," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2007-82
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    File URL: http://www.wider.unu.edu/sites/default/files/rp2007-82.pdf
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    References listed on IDEAS

    as
    1. Kingdon, Geeta & Knight, John, 2006. "The measurement of unemployment when unemployment is high," Labour Economics, Elsevier, vol. 13(3), pages 291-315, June.
    2. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
    3. Kingdon, Geeta Gandhi & Knight, John, 2004. "Unemployment in South Africa: The Nature of the Beast," World Development, Elsevier, vol. 32(3), pages 391-408, March.
    4. Geeta Kingdon & John Knight, 2007. "Unemployment in South Africa, 1995--2003: Causes, Problems and Policies," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(5), pages 813-848, November.
    5. Knight, John & Song, Lina, 2006. "Towards a Labour Market in China," OUP Catalogue, Oxford University Press, number 9780199215553.
    6. John Knight & Jinjun Xue, 2006. "How High is Urban Unemployment in China?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(2), pages 91-107.
    7. Knight, John & Li, Shi, 2005. "Wages, firm profitability and labor market segmentation in urban China," China Economic Review, Elsevier, vol. 16(3), pages 205-228.
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    Citations

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    Cited by:

    1. Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2011. "China has reached the Lewis turning point," China Economic Review, Elsevier, vol. 22(4), pages 542-554.
    2. Marco G. Ercolani & Zheng Wei, 2010. "An Empirical Analysis of the Lewis-Ranis-FEi Theory of Dualistic Economic Development for China," Discussion Papers 10-06, Department of Economics, University of Birmingham.

    More about this item

    Keywords

    China; South Africa; Lewis model; wages; labour supply; rural-urban migration; unemployment;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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