Wage Differentials and Economic Growth (Routledge Revivals)

Pasquale Sgro

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781317527855
• Edition: 1
• Topic: Economics
• Subtopic: Econometrics
• Index: Economics

This book, which was first published in 1980, is concerned with one particular branch of growth theory, namely descriptive growth theory. It is typically assumed in growth theory that both the factors and goods market are perfectly competitive. In particular this implies amongst other things that the reward to each factor is identical in each sector of the economy. In this book the assumption of identical factor rewards is relaxed and the implications of an intersectoral wage differential for economic growth are analysed. There is also some discussion on the short-term and long-run effects of minimum wage legislation on growth. This book will serve as key reading for students of economics.

PART ONE
Two-sector Growth Models

In Part One, the basic growth models that will be used throughout the book are set out. The first chapter is concerned with setting up the simplest type of two-sector model, namely the fixed production coefficient case, while in Chapter 2, the more general variable production coefficient case is presented. The main results are presented in a concise manner to facilitate comparison with Part Two where we introduce intersectoral wage differentials and minimum wages into these growth models.

The aim in Part One is not to present an exhaustive survey of the two-sector growth model but rather to present and focus attention on certain important results which are most affected by the introduction of wage differentials and minimum wages.

CHAPTER 1
A Two-sector Fixed Coefficient Growth Model

1.1 Introduction

In this chapter, the simplest version of the two-sector growth model will be constructed. There are two productive sectors which produce consumption and investment goods respectively, using two factors of production, capital and labour. The proportions in which capital and labour are used in the production process in each sector are fixed. For the demand side of the model, two alternative savings assumptions will be used. Although the fixed coefficient model is essentially a technologically determined model, the use of different savings assumptions highlights the important role that demand plays in this model. The first savings function used is what is called the ‘proportional savings’ function; that is, a given constant average propensity to save (out of national income). The second savings function is known as the ‘classical savings’ function. With this second function, the assumption is made that the savings role is carried out by two classes of individuals, namely wage earners and profit earners. It is assumed that each ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• Dedication
• Acknowledgements
• General Remarks
• Part One: Two-Sector Growth Models
• Part Two: Wage Differentials and Economic Growth
• Part Three: International Trade and Economic Growth
• Appendix 1: Homotheticity and Demand
• Appendix 2: The Elasticity of Labour Mobility
• References
• Author Index
• Subject Index