Normal view MARC view ISBD view

Wage Gaps and Development [electronic resource] : Lessons from U.S. History / Alex Mourmouras.

By: Mourmouras, Alex.
Contributor(s): Rangazas, Peter.
Material type: materialTypeLabelBookSeries: IMF Working Papers; Working Paper: No. 07/105Publisher: Washington, D.C. : International Monetary Fund, 2007Description: 1 online resource (45 p.).ISBN: 1451866690 :.ISSN: 1018-5941.Subject(s): Calibrated Dynamic General Equilibrium Models | Economic Development | Farm | Farming | Fertility | Rural-Urban Wage Gaps | United States | ZimbabweAdditional physical formats: Print Version:: Wage Gaps and Development : Lessons from U.S. HistoryOnline resources: IMF e-Library | IMF Book Store Abstract: During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general equilibrium model that closely matches the two-century long paths of farm and non-farm labor productivity growth, schooling, and fertility in the U.S. The family farm emerges as an important institution that contributes to differences in wages and labor productivity. Income from farm ownership compensates farm workers for the relatively low labor productivity and wages earned in agriculture. Farm ownership, along with the higher cost of raising children off the farm, generated a two-fold gap in labor productivity across the farm and nonfarm sectors in the 19th century US. Consequently, the reallocation of labor from farming to industry raised the average annual growth rate of output per worker by about half a percentage point over the 19th century. The paper also draws some lessons from the quantitative analysis of U.S. economic history for currently developing countries.
Tags from this library: No tags from this library for this title. Log in to add tags.
    average rating: 0.0 (0 votes)
No physical items for this record

During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general equilibrium model that closely matches the two-century long paths of farm and non-farm labor productivity growth, schooling, and fertility in the U.S. The family farm emerges as an important institution that contributes to differences in wages and labor productivity. Income from farm ownership compensates farm workers for the relatively low labor productivity and wages earned in agriculture. Farm ownership, along with the higher cost of raising children off the farm, generated a two-fold gap in labor productivity across the farm and nonfarm sectors in the 19th century US. Consequently, the reallocation of labor from farming to industry raised the average annual growth rate of output per worker by about half a percentage point over the 19th century. The paper also draws some lessons from the quantitative analysis of U.S. economic history for currently developing countries.

Description based on print version record.

There are no comments for this item.

Log in to your account to post a comment.

Ⓒ 2019 Dedan Kimathi University of Technology

Library