Growth and Wage Inequality in a Dual Economy

  1. Jonathan R. W. Temple*

Article first published online: 4 APR 2005

DOI: 10.1111/j.0307-3378.2005.00218.x

Issue

Bulletin of Economic Research

Bulletin of Economic Research

Volume 57, Issue 2, pages 145–169, April 2005

Additional Information

How to Cite

Temple, J. R. W. (2005), Growth and Wage Inequality in a Dual Economy. Bulletin of Economic Research, 57: 145–169. doi: 10.1111/j.0307-3378.2005.00218.x

Author Information

  1. Department of Economics, University of Bristol, Bristol and CEPR

* *Department of Economics, University of Bristol, 8 Woodland Road, Bristol BS8 1TN and CEPR. Email: jon.temple@bristol.ac.uk.

Publication History

  1. Issue published online: 4 APR 2005
  2. Article first published online: 4 APR 2005

SEARCH

SEARCH BY CITATION

ARTICLE TOOLS

Get PDF (158K)

Keywords:

  • dualism;
  • growth;
  • inequality;
  • poverty
  • D30;
  • O15

Abstract

Who benefits from economic growth? This paper analyses the distributional impact of different types of growth within a two-sector model. The paper first presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then applied to the Harris–Todaro model with an urban non-agricultural sector and rural agriculture. It is shown that capital accumulation or technical progress in agriculture can shift the Lorenz curve inwards and reduce wage inequality, while the effects of development in non-agriculture are typically ambiguous.

Get PDF (158K)