Labor Market Segmentation in a Two-Sector Model of an Open Economy

Dimitri Demekas

IMF Staff Papers, 1990, vol. 37, issue 4, 849-864

Abstract: The effects of labor market segmentation in a two-sector open economy model are examined. The model demonstrates how the structure of the labor market affects the real exchange rate, and is then used to examine the effects of two common labor market policies: increasing the degree of primary market coverage, and implementing wage restraint in the primary market. Increasing coverage increases unemployment and leads to a real appreciation. Real wage restraint, however, reduces unemployment and has ambiguous but probably small effects on the real exchange rate.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.jstor.org/stable/3867231?origin=pubexport main text (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Labor Market Segmentation in a Two-Sector Model of An Open Economy (1990)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:37:y:1990:i:4:p:849-864

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().