Welfare implications of technological progress with segmented factor markets

Soumyatanu Mukherjee and Sameen Zafar

MPRA Paper from University Library of Munich, Germany

Abstract: Using a Heckscher-Ohlin-Samuelson type general equilibrium framework with segmented factor markets, we show that uniform technological progress in either the unorganized or the fixed wage organized sector can improve the real income of a small, open developing economy. However, uniform productivity improvement in the unorganized sector turns out to be relatively more egalitarian since it helps the marginalized informal workers in terms of wage-earnings and employment whereas productivity take-off in the organized sector hurts them.

Keywords: Technological progress; general equilibrium, segmented factor markets; welfare (search for similar items in EconPapers)
JEL-codes: F11 F16 O17 (search for similar items in EconPapers)
Date: 2014-08-30
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