Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126450
Authors: 
Mukherjee, Soumyatanu
Zafar, Sameen
Year of Publication: 
2015
Series/Report no.: 
CREDIT Research Paper 15/02
Abstract: 
Motivated by a set of stylised facts based on provincial data for India, this paper investigates the incidence of urban poverty by modelling the impact of technological progress in the formal sectors of the economy on the urban informal wage in a four-sector general equilibrium framework with labour and capital market distortions. Uniform technological progress only in the capital intensive segment of the formal sectors affects the urban informal workers adversely, whereas productivity improvement only in the less capital intensive sector benefits them. The sensitivity analysis demonstrates that when both formal sectors undergo uniform technological progress at the same rate, informal wage may improve if the vertically integrated sector is less capital intensive (as capital flows to the informal sectors). This helps in understanding trends in urban poverty given the strong association between the urban informal wage and degree of urban poverty.
Subjects: 
Poverty
Technological Progress
Informal Wage
General Equilibrium
JEL: 
E26
F11
F16
J46
I32
O17
Document Type: 
Working Paper

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