Lewis through a looking glass : public sector employment, rent-seeking, and economic growth
This paper argues that the labor transfer process outlined by the Lewis model (1954) can give rise to surplus labour - in the sense than the marginal product of labour is less that the wage - in the public part of the modern sector and that this may deprive the modern sector of its dynamism. Moreover, creating sheltered employment tends to be self-perpetuating. It creates and consolidates vested interests that seek to perpetuate the protected jobs. In the inverse of the Lewis model, the extent of surplus labour increases, rather than diminishes, over time.
|Date of creation:||30 Nov 1988|
|Date of revision:|
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- Hill, Hal, 1982. "State enterprises in a competitive industry: An Indonesian case study," World Development, Elsevier, vol. 10(11), pages 1015-1023, November.
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- Krueger, Anne O. & Tuncer, Baran, 1982. "Growth of factor productivity in Turkish manufacturing industries," Journal of Development Economics, Elsevier, vol. 11(3), pages 307-325, December.
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