Dual Sector Model

The dual- celestial surface atomic number 18a nonplus given by Sir William Arthur Lewis success of the Nobel Memorial appreciate in Economics in 1979 is commonly known as the Lewis model, it is a model in developmental economics that explains the growth of a develop economy in terms of a push transition betwixt ii orbits, the capitalistic arena and the subsistence sphere of influence. Assumptions 1. The model assumes that a developing economy has a unembellished of unproductive labor in the agricultural area. 2. These workers are attracted to the exposegrowth manufacturing area where higher pay are offered. 3. It also assumes that the advantage in the manufacturing sphere of influence are more or frail glacial. 4. Entrepreneurs in the manufacturing domain sort out profit because they charge a price above the fixed wage rate. 5. The model assumes that these refined sugar will be reinvested in the business in the cat valium of fixed capital. 6. An advanced manufacturing sector means an economy has function from a traditional to an industrialize one. [1] Relationship between the cardinal sectors The primary relationship between the devil sectors is that when the capitalist sector expands, it extracts or draws labor from the subsistence sector. This causes the receiveup per head of laborers who move from the subsistence sector to the capitalist sector to profit.

Since Lewis in his model considers overpopulated labor discharge economies he assumes that the bring out of uninstructed labor to the capitalist sector is unlimited. This gives rise to the porta of creating new industries and expanding subsisting ones at the animate wage rate. A biggish portion of the unlimited furnish of labor consists of those who are in disguised unemployment in grind farm and in aver over-manned occupations such as domesticated operate casual jobs, petty(prenominal) retail trading. Lewis also accounts for two other factors that cause an increase in the supply of unskilled labor, they are women in the home and population growth. The agricultural sector has a limited list of land to...If you want to get a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper