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UNU-WIDER China, South Africa, and the Lewis Model

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A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

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China, South Africa, and the Lewis Model

The paper uses the Lewis model as a framework for examining the labour market progress of two labour-abundant countries, China and South Africa, towards labour shortage and generally rising labour real incomes. In the acuteness of their rural-urban divides, forms of migrant labour, rapid rural-urban migration, and high and rising real wages in the formal sector, the two economies are surprisingly similar. They differ, however, in the dynamism of their formal sector growth of output and employment, and in the growth of their labour forces. Whereas China – a labour-surplus economy par excellence despite unemployment until recently taking only a disguised form – is moving rapidly in the direction of labour scarcity, South Africa – which historically has been short of labour – is moving towards increased labour surplus in the form of open unemployment. The paper draws on research previously conducted by the author in separate research projects on the two countries.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2007/82
Title:
China, South Africa, and the Lewis Model
Authors:
John Knight
Publication date:
December 2007
ISSN Web:
1810-2611
ISBN 13 Web:
9789292300357
Copyright holder:
© UNU-WIDER
Copyright year:
2007
Keywords:
China, South Africa, Lewis model, wages, labour supply, rural-urban migration, unemployment
JEL:
J0, J4, O4, O5
Project:
Southern Engines of Global Growth
Sponsor:
The governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency — Sida) and the United Kingdom (Department for International Development).
Format:
online

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