This paper examines the two-sector general equilibrium model under a variety of labor-market distortions, including minimum wages and factor price differentials (both absolute and proportional). We introduce a new concept - the "wage sensitivity" ranking between sectors - and show that a necessary and sufficient condition for temporal convergence locally is that the physically labor-intensive sector be the wage-sensitive sector.
External Notes
A hard copy is available in UCD Library at GEN 330.08 IR/UNI
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
88/5
Subject – LCSH
Equilibrium (Economics)
Labor market
Wages
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License