Oil price shock and informal workers in dual labor markets |
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Authors: | Sarbajit Chaudhuri Saibal Kar |
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Institution: | 1. Department of Economics, University of Calcutta, Kolkata, India;2. Centre for Studies in Social Sciences, Calcutta, India |
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Abstract: | This paper examines the impact of a rise in oil prices on the wages of workers in the unorganized sector of a developing economy. The model economy is comprised of two non-traded transport sectors, formal and informal, along with other sectors. The main results that we obtain are as follows. The informal transport sector contracts when fuel price rises and lowers the real income of the informal workers. The per-unit return to land rises, and the factor readjustments even raise the output of other sectors in the economy. We also show why inclusion of non-passenger transport services does not alter the main outcomes of the model. |
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Keywords: | Oil price transport general equilibrium informal sector real income |
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