Journal ArticleDOI
Characterisation of Economic Growth in Developing Economies with Informal Sector
TLDR
In this paper, the authors present a general equilibrium model of a developing economy with a capital intensive formal sector and a large informal sector with sector-specific capital to analyse the effects of investments on the sectoral returns to capital, sectoral wage rates, and composition of output and employment.Abstract:
The paper presents a general equilibrium model of a developing economy with a capital intensive formal sector and a large informal sector with sector-specific capital to analyse the effects of investments on the sectoral returns to capital, sectoral wage rates, and composition of output and employment. Beginning with capital market disequilibrium (unequal sectoral rates of return) and labour market distortion (formal-informal wage gap), the model traces the evolution of the economy till capital market equilibrium is attained. The investments in the formal sector equalise the wages (a “turning point” in growth a la Lewis) and reduces the size of the informal sector. The sectoral rates of returns equalise only if there is no factor intensity reversal, otherwise the economy specialises in the production of formal goods. The investments in the informal sector equalise the rates of return, do not affect the size of the formal sector and finally, a formal-informal wage gap persists provided factor intensities are not reversed.read more
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The Stolper-Samuelson Theorem in a Wage Differential Framework
TL;DR: The authors developed a wage differential model with a unionized and a non-unionized informal sector for a small open economy, where the unionized wage rate adjusts to a cost of living index and the informal wage is market-determined.
Journal ArticleDOI
Diffusion of innovations and labor market challenges: a multiple case study from Angola
Édney Santos,Daphne Halkias +1 more
TL;DR: In this paper, the authors conducted a qualitative multiple case study to gain a deeper understanding of the views of stakeholders residing within impoverished communities in Angola on rapid technology diffusion and its implication on labor market challenges within their regions.
Barriers to Entry and Returns to Capital in Informal Activities
TL;DR: In this article, the authors investigated the patterns of capital entry barriers and capital returns in informal Micro and Small Enterprises (MSE's) using a unique micro data set seven West-African countries.
Journal ArticleDOI
Social Security for Unorganised Workers in India
TL;DR: The workers in the unorganised sector in India constitute about ninety-three percent of the total workforce of the country as discussed by the authors, and they are facing serious problems in their work.
Journal ArticleDOI
Investment and wage gap in India: a general equilibrium analysis
TL;DR: In this paper, the authors build a general equilibrium model of a developing economy with a large informal sector and a capital-intensive formal sector with sector-specific capital and incorporate endogenous demand, with homothetic preferences, a small initial wage premium and elastic relative demand.
References
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Journal ArticleDOI
The Structure of Simple General Equilibrium Models
TL;DR: In this paper, the authors present an extended model for demand endogenous substitution, aggregate elasticity of substitution, convergence to balanced growth, and saving behavior of technology change, including the Magnification Effect.
Journal ArticleDOI
Informality and Development
Rafael La Porta,Andrei Shleifer +1 more
TL;DR: In this article, a report from the McKinsey Global Institute describes informal firms as parasites competing unfairly with law-abiding formal firms and argues that informality should be suppressed, not unleashed.
Book ChapterDOI
The analysis of union behavior
TL;DR: There is a substantial body of economic research, largely theoretical but with a recent empirical component, on the analysis of union behavior as mentioned in this paper, and a working definition of a labor union and describes the economic modus operandi of labor unions in the American economy.
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The Analysis of Union Behavior
Henry S. Farber,Henry S. Farber +1 more
TL;DR: There is a substantial body of economic research that models the behavior of labor unions as maximization of a well defined objective function as discussed by the authors, and a selective critical survey of this literature and a preliminary consideration of some important problems that have not been addressed in the literature to date.
Journal ArticleDOI
Distortions in Factor Markets and the General Equilibrium Model of Production
TL;DR: In this article, the authors explore how distortions can affect the shape of the transformation schedule and the optimal strategy to be followed by a factor of production intent on maximizing its returns in a two-sector model.