The Micro-Economics of 'Surplus Labor

Gustav Ranis ()
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Gustav Ranis: Economic Growth Center, Yale University

Working Papers from Economic Growth Center, Yale University

Abstract: This paper examines the apparent conflict between the classical assumption of a bargaining agricultural sector wage and the neoclassical assumption of a competitive wage in the context of a labor surplus developing economy. It concludes that the relatively inelastic supply of labor hours offered by low income small or landless farmers in the static micro-economic leisure/work context is perfectly consistent with the persistence for some time of an institutional real wage offered to the non-agricultural sector of the dual economy. Empirical evidence is brought to bear in support of that position.

Keywords: Institutional vs. Competitive Real Wage; Labor Surplus Economy; Neoclassical vs. Classical Labor Markets (search for similar items in EconPapers)
Pages: 24 pages
Date: 1997-02
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:egc:wpaper:772

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