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Petty services, profit‐led growth and rural–urban migration in a developing economy

Gogol Thakur and Subrata Guha

Metroeconomica, 2019, vol. 70, issue 1, 144-171

Abstract: This paper develops a structuralist urban dual economy model for a developing economy consisting of a capitalist formal sector and a “petty” or informal service sector. The petty service sector plays an important role in wage determination and capital accumulation in the formal sector. The urban dual economy is situated in the midst of a rural area endowed with generous amount of surplus labour. The rural area augments urban labour supply over time through rural–urban migration. The paper, therefore, incorporates rural–urban migration within a structuralist framework and highlights its implication for growth and structural change in urban spaces of developing economies riddled with persistent formal–informal duality.

Date: 2019
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Handle: RePEc:bla:metroe:v:70:y:2019:i:1:p:144-171