The Analytics of Segmented Labor Markets

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: This paper provides an analytical overview of models of segmented urban labor markets in developing countries. It begins by reviewing the characteristics of the labor market in these countries, including institutions and regulations that may lead to segmentation. The wage and employment e?ects of imperfect labor mobility between the formal and informal sectors are then illustrated with a simple graphical analysis. Formal models of urban wage formation are discussed next, and a two-sector shirking model with segmented urban labor markets is presented. The model is used to analyze the impact of an increase in the minimum wage on unskilled unemployment.

Pages: 87 pages
Date: 2005
New Economics Papers: this item is included in nep-dev, nep-lab and nep-ltv
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Citations: View citations in EconPapers (6)

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Working Paper: The Analytics of Segmented Labor Markets (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:52

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