Dualism and Aggregate Productivity

Jonathan Temple

No 4387, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper shows how to calibrate a two-sector general equilibrium model of production using a small number of parameter assumptions and readily available data. The framework is then used to analyse the costs of labour market dualism. The Paper quantifies the effects of rural-urban wage differentials and urban unemployment on aggregate productivity, wages and returns to capital, factor shares, and sectoral structure. One of the main findings is that labour market rigidities can have a major impact on the extent of industrialization.

Keywords: Dualism; Productivity; Wage differentials; Minimum wages (search for similar items in EconPapers)
JEL-codes: D61 O40 (search for similar items in EconPapers)
Date: 2004-05
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Citations: View citations in EconPapers (6)

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