Ira Gang
Rutgers University
Department of Economics
E-mail: gang@economics.rutgers.edu

Item Number:  [C1]
Title: Labor Markets, Lorenz Curves and Development Strategies: Some Aspects
Abstract: In this paper we look at the consequences for inequality of alternative development strategies in alternative models of less developed country (LDC) labor markets.  We do this by  first modeling the initial distribution of income.  The literature proposes four different models of labor market dualism which we explore here: the neoclassical two-sector model (the textbook model), the Lewis-Fei-Ranis model, the Brecher economy-wide minimum wage economy, and the Harris-Todaro sector-specific minimum wage model.  After modeling these we look at the consequences for inequality change of three different types of economic development patterns: modern sector enrichment, modern sector enlargement, and traditional sector enrichment.  We find if the Harris-Todaro or Lewis-Fei-Ranis paradigms hold, traditional sector enrichment policies seem dictated, while if the world looks like the traditional textbook two-sector model or like the uniform minimum wage model, modern sector enlargement is indicated.  Across the board, however, modern sector enrichment is to be shunned

Reference:  Arindam Das-Gupta and Ira N. Gang, Labor Markets, Lorenz Curves and Development Strategies: Some Aspects, in Maria Willumsen and Robert D. Cruz, eds., Modeling and Simulation, volume 19, part 1, Instrument Society of America, North Carolina, 1988, 101-106

Co-Author Information:
Arindam Das-Gupta
Indira Gandhi Institute of Development Research
E-Mail:  oldmonk87@yahoo.com

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