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Petty services, profit‐led growth and rural–urban migration in a developing economy
Author(s) -
Thakur Gogol Mitra,
Guha Subrata
Publication year - 2019
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12233
Subject(s) - dual economy , informal sector , economics , developing country , service economy , urban economics , profit (economics) , wage , tertiary sector of the economy , capital (architecture) , situated , labour economics , economy , market economy , economic growth , geography , microeconomics , archaeology , artificial intelligence , computer science
This paper develops a structuralist urban dual economy model for a developing economy consisting of a capitalist formal sector and a “petty” or informal service sector. The petty service sector plays an important role in wage determination and capital accumulation in the formal sector. The urban dual economy is situated in the midst of a rural area endowed with generous amount of surplus labour. The rural area augments urban labour supply over time through rural–urban migration. The paper, therefore, incorporates rural–urban migration within a structuralist framework and highlights its implication for growth and structural change in urban spaces of developing economies riddled with persistent formal–informal duality.