Recession in the Skilled Sector and Implications for Informal Wage
12 Pages Posted: 22 Oct 2009
Date Written: April 21, 2009
Global recession is likely to hit the skilled sector or the so-called white goods, white collared sector in a typical developing economy. In this paper we try to analyze the impact of such an event on informal wage as the vast majority of the workforce in the developing world is employed in the unorganized or informal sector. In particular, we demonstrate the analytical possibility that a recession in the skilled sector will actually increase real informal wage.
Keywords: Recession, skill, capital-labor ratio, informal wage, general equilibrium
JEL Classification: E31, J21, J31
Suggested Citation: Suggested Citation