Technology, trade and ‘urban poor’in a general equilibrium model with segmented domestic factor markets

Type Journal Article - International Review of Economics & Finance
Title Technology, trade and ‘urban poor’in a general equilibrium model with segmented domestic factor markets
Author(s)
Volume 45
Publication (Day/Month/Year) 2016
Page numbers 400-416
URL http://www.sciencedirect.com/science/article/pii/S1059056016300570
Abstract
Drawing on the evidence from Indian provinces, this paper, using a four-sector general equilibrium model with segmented domestic labour and capital markets, proposes that factor-specific technological progress only in the capital-intensive segment of the urban formal sectors may affect the urban informal workers adversely, while a trade induced progress in the vertically integrated skill-intensive formal sector benefits them. The numerical analysis further illuminates the importance of credit-product inter-linkage to channel the impact on urban informal wage. Such analysis also helps to infer the well-being of the urban poor, given its strong association with the trends in informal wages.

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