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Journal of Economic Integration 2014 September;29(3) :450-469.
Liberalisation and Jobless Growth in Developing Economy

Soumyatanu Mukherjee 

School of Economics, CREDIT & GEP, University of Nottingham, Nottingham, U.K.
Corresponding Author: Soumyatanu Mukherjee ,Tel: +44 1159515620, Fax: +44 1159514159, Email:
Copyright ©2014 Journal of Economic Integration
This paper explains why a developing country may experience a jobless growth in the organised sectors during liberalised regime within the framework of a three-sector mobile capital version of Harris-Todaro type general equilibrium model describing rural-urban migration with agricultural dualism and a non-traded intermediate input. Main findings support the fact that as a consequence of different trade reform policies, organised sectors have experienced increased competition from foreign markets which has forced them to lax labour laws, with the freedom to switch towards more capital-intensive techniques of production, resulting retrenchment of relatively less productive workers and ending up with a jobless growth under the liberalised regime. These results are particularly interesting for their contradiction to the predictions of the standard Harris-Todaro model.

JEL Classification
F11: Neoclassical Models of Trade
F16: Trade and Labor Market Interactions
J21: Labor Force and Employment, Size, and Structure
O24: Trade Policy; Factor Movement Policy; Foreign Exchange Policy
Keywords: Trade Liberalisation | Labour Market Reform | Agricultural Dualism | Jobless Growth | Non-traded Intermediate Input | Urban Unemployment
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