This paper approaches labor markets through multisector modeling. The first main substantive section presents the essence of multisector modeling, in particular, the role of labor market dualism. Given that labor markets often consist of quite distinct segments, a useful and insightful analytical approach is to start with just two interrelated segments. The second main substantive section is on models of wages and employment in the formal economy. This section covers 1) the market-clearing labor market model and the presumed equilibrating forces, 2) above-market-clearing wages set institutionally, 3) above-market-clearing wages set by efficiency wage considerations, and 4) above-market-clearing wages set by worker behavior. The third main substantive section is on wages and employment in the informal economy. This section presents three characterizations of informal sector labor markets: 1) the informal economy as a free-entry sector that prospective workers enter only as a last resort, 2) the informal economy as a desirable sector that workers choose in preference to formal sector work, and 3) the informal economy with its own internal dualism, combining 1) and 2). The fourth main substantive section is on intersectoral linkages. The models here are: 1) the integrated labor market model with full market clearing, 2) crowding models, and 3) the Harris-Todaro model.

/pdf/a-guide-to-multisector-labor-market-models-20wrguyigl.pdf

A guide to multisector labor market models

This paper examines total factor productivity growth, technological progress, and technical efficiency change in postreform China. Production functions are estimated for three sectors, state industry, rural industry, and agriculture, using panel data from 1985–1991. The major issues considered include (1) introducing a model in which productivity growth is decomposed into two components, technological progress and changes in technical efficiency, and (2) comparing productivity and efficiency performance among the regions as well as across the sectors.

Productivity growth, technological progress, and technical efficiency change in China: A three-sector analysis

Labor markets are important, because most people, especially the poor, derive all or the great bulk of their income from the work they do. This paper approaches labor markets through models of segmented labor markets. The first main substantive section presents the essence of segmented labor market modeling, in particular, the role of labor market dualism. Given that labor markets often consist of quite distinct segments, a useful and insightful analytical approach is to start with just two interrelated segments, which here are termed formal and informal. Accordingly, the next sections present models of wages and employment in the formal sector, the informal sector, and the linkages between the two respectively. The final substantive section shows the contributions that these models make to understanding and policy analysis in labor markets. It would not be expected that the same model would fit East Africa and East Asia or South Africa and South Korea. Surely, the “correct” model is context-specific. Blending empirical observation and analytical modeling has yielded great advances. Sound labor market policies require sound labor market models.

/pdf/segmented-labor-market-models-in-developing-countries-1jug55os2w.pdf

Segmented Labor Market Models in Developing Countries

Labor market performance in developing countries - a survey

Resurgent interest has been manifested among development economists in trickle-down, ie, the view that the more rapid the rate of economic growth, the more rapid the improvement in employment and income distribution' Throughout this paper, the term 'income distribution' will refer to the location and dispersion of the pattern of incomes, ie, to 'absolute incomes and poverty' and to 'relative income inequality' Empirical evidence supports trickle-down in some cases, but the evidence is contrary to trickle-down in others The evidence from my own study of six countries' experiences2 is summarised in Tables i and 2

/pdf/employment-income-distribution-and-economic-growth-in-seven-3f403crz6y.pdf

Employment, income distribution and economic growth in seven small open economies

The Employment Problem in Less Developed Countries.—By David Turnham, assisted by Ingelies Jaeger. Development Centre of the Organization for Economic Cooperation and Development, Paris. 1971.

Technical change has been considered as one of the most important determinants of economic growth. In developed economies, a proportionately higher percentage of GDP growth is attributable to technological progress and technical efficiency. However, technical change in developing countries is in its early stages and increased use of factor inputs is still the dominant source of economic growth. An attempt has been made in this paper to analyse technological progress and technical efficiency and their contribution to economic growth along with other factors of production by using more efficient methods in the manufacturing and agriculture sectors of Pakistan. There are a few studies on technological growth and technical efficiency change in Pakistan but they suffer from certain limitations. Most of them use the terms of technical change and productivity synonymously. Further, all of them use Hicks’s formula of neutral technical change and assume that technical change is happening at a constant rate. We have attempted to measure technical change, technical efficiency, and productivity in the form of the Hicks neutral technical change as well as in the form of variable and continuous and discrete technical change. Besides, this paper also analyses the impact of technical change on input demand (i.e., its impact on labour and capital demand) and examines the issue of technical change being either labour-saving or capital-saving. We found that technical change was taking place at a continuous and variable rate. The major contributor to the growth of output and value-added in both sectors was capital, contributing over 50 percent. Labour share was about 20 percent in the agriculture sector and about 10 percent in the manufacturing sector. Technical change share was very significant in manufacturing but not so in agriculture. The manufacturing sector in Pakistan has grown at an annual rate of about 6 percent during 1970s and at 8.7 percent during 1980s, and its share in GDP has increased from 16.5 percent to about 19 percent, but it has failed to generate new employment opportunities for the labour force. The employment growth rate is only about 2 percent.

/pdf/technical-change-technical-efficiency-and-their-impact-on-27i6rl78ww.pdf

Technical Change, Technical Efficiency, and Their Impact on Input Demand in the Agricultural and Manufacturing Sectors of Pakistan

This paper examines the factors behind low crop yield in Cholistan. Both the quantitative and qualitative analysis show how the low levels of agricultural productivity in this area may be linked to material and climatic factors. The quantitative analysis is mainly focused on physical factors. The qualitative analysis, however, emphasises that relative inefficiency of agricultural activity in Cholistan reflects the influence of physical, economic, social and, most importantly, climatic factors. The quantitative findings provide valuable insight into various ‘sources of productivity’ in terms of acreage effect, capital input effect and irrigation water availability effect. The size of the positive and significant coefficients on these variables suggest the extent to which one or the other variable effect is prominent in improving the crop yield. The qualitative analysis examines multiple interrelated factors which can be blamed on for relative inefficiency of Cholistani farmers. The hot climate of the area turns out to be the most critical variable in this analysis. Many specific technological drought-mitigating measures are proposed. However, for consistent policy formulation, a thorough study and quantitative evaluation of the potential and practicality of these measures in Cholistan is suggested.

Productivity Constraints of Cholistani Farmers

PIP: This paper explores the effects of agricultural change on several socioeconomic and demographic characteristics that influence fertility decisions in 11 districts of the Indian Punjab from 1961-71. The basis of the study relates to a household production model which embodies birth rate and infant mortality rate as endogenous variables. Linkage between agricultural modernization and the above variables are discussed. The model is estimated for pooled cross-sectional and time-series observations of the 11 districts. The most important finding is that the infant mortality rate has a positive effect on fertility and, conversely, fertility rates have a positive impact on infant mortality. Agricultural improvements, if equally distributed, lead to a decline in infant mortality and fertility. Implications of the study are that the supply and demand for contraception through socioeconomic development should go hand in hand. Policy makers should attach importance to an even distribution of land and income as well as to an improvement of health and educational facilities, nutritional intake, and sanitation.

/pdf/impact-of-agricultural-modernization-on-crude-birth-rate-in-403wytkat1.pdf

Impact of agricultural modernization on crude birth rate in Indian Punjab.

The manufacturing sector has played an important role in the economic development of Pakistan. The main indicator of industrial growth-the percentage share of manufacturing in Gross National Product-has been increasing. However, the percentage of employment in manufacturing has -.decreased. "The share of manufacturing in GNP has increased from 8.1 percent in 1950 to 16.0 percent in 1968. But employment in manufacturing sector declined from 15.0percentoftotalemploymentto 14.3 percent in 1965 [5, p.212].

/pdf/short-term-employment-functions-in-manufacturing-industries-3dl7trbpcg.pdf

Short-Term Employment Functions in Manufacturing Industries of Pakistan

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