Post War Industrialisation and Growth: What Can a Lewis Type Model Explain?

UNSW School of Economics Working Paper

26 Pages Posted: 27 Jan 2001

See all articles by Peter E. Robertson

Peter E. Robertson

The University of Western Australia

John Landon-Lane

Rutgers University, New Brunswick/Piscataway - Faculty of Arts and Sciences-New Brunswick/Piscataway - Department of Economics

Date Written: January 2001

Abstract

We investigate the extent to which segmented labour markets in industrializing economies, generate productivity and GDP growth. The paper presents a Lewis type model in which an efficiency wage results in a productivity gap between the traditional and modern sectors. We find, first, that the demand for modern sector labour is driven mainly by physical capital accumulation. Second, for 20% of our sample, segmented labour markets result in an implied additional return to capital of 13 percentage points. Thus we also find that this process of structural change has an important quantitative effect of observed growth rates.

JEL Classification: 00, 01, 03

Suggested Citation

Robertson, Peter E. and Landon-Lane, John, Post War Industrialisation and Growth: What Can a Lewis Type Model Explain? (January 2001). UNSW School of Economics Working Paper, Available at SSRN: https://ssrn.com/abstract=257946 or http://dx.doi.org/10.2139/ssrn.257946

Peter E. Robertson (Contact Author)

The University of Western Australia ( email )

John Landon-Lane

Rutgers University, New Brunswick/Piscataway - Faculty of Arts and Sciences-New Brunswick/Piscataway - Department of Economics ( email )

75 Hamilton Street
New Brunswick, NJ 08901
United States

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