ON LABOUR MARKET DUALISM IN THE LEWIS MODEL: A COMMENT*

Richard P. C. Brown

Manchester School, 2006, vol. 74, issue 3, 350-354

Abstract: In a special issue of this journal commemorating the 50th anniversary of W. Arthur Lewis’s (The Manchester School, Vol. 28 (1954), No. 2, pp. 139–191) seminal paper, the Lewis model is treated as a model of labour market dualism (Fields, The Manchester School, Vol. 72 (2004), No. 6, pp. 724–735). This interpretation is flawed for a number of reasons. First, it overemphasizes the role ascribed by Lewis to intersectoral earnings differentials in his original model. Second, it fails to acknowledge that a major shortcoming of the model was its inability to account for the widening intersectoral earnings differential observed across a wide range of developing economies. For Lewis himself this was one of the ‘major theoretical puzzles of the period’ (1979, p. 150). Third, it ignores Lewis’s subsequent revision of the model (Lewis, The Manchester School, Vol. 47 (1979), No. 3, pp. 211–229) that, ironically, incorporates a dual labour market to resolve this puzzle. However, for Lewis the critical issue was dualism within the modern sector, not, as Fields understands it, labour market dualism between the modern and traditional sectors. Fields’s appreciation of the contribution of the Lewis model to understanding the process of wage determination in developing economies is therefore misplaced.

Date: 2006
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