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October 2014

Urbanization is Narrowing India’s Rural-Urban Wage Gap

Viktoria Hnatkovska's picture

Busy market area in Chennai, India. Photo credit: flickr @mckaysavage

The inequality between rural and urban locations is one of the largest contributing factors to the overall economic inequality in a country. Yet there are a lot of unanswered questions about the sources of this inequality, such as how structural transformation – namely the movement of labor from low productivity sectors like agriculture to higher productivity sectors like industry – affects the rural-urban divide. To shed light on this question, Amartya Lahiri (University of British Columbia) and I recently wrote a paper on what occurred in India between 1983 and 2010. Our findings highlight that over the past three decades, there has been a rapid wage convergence between urban and rural areas – with the fast growth of the urban labor force playing a major role.

The Dismal State of Numbers for Economic Governance in Africa

Morten Jerven's picture

A farmer in the Kibirichia area of Mount Keyna. Photo credit: Flickr @ciat | CIAT International Center for Tropical Agriculture

In 2010, Ghana announced that, thanks to a GDP revision, its GDP had almost doubled. In April 2014, an even larger increase in GDP, again thanks to a statistical revision, was announced by Nigeria, catapulting it into Africa’s largest economy, ahead of South Africa. How were these vast increases in wealth possible? I would argue that the huge jumps in GDP in Nigeria and Ghana were symptomatic of major gaps in Sub-Saharan Africa data that make it extremely difficult for statistical systems to capture economic trends and development – and thus for policy makers to shape an agenda for sustainable economic development.

Replacing Europe’s Dual Labor Markets with a Single Contract

Tito Boeri's picture

In recent decades, many European countries have tried to instill greater labor market flexibility through increased use of fixed-term, temporary work contracts, as opposed to open-ended or permanent ones. The result has been dual labor markets, with temporary workers having fewer rights and job security than those on permanent contracts. One expert on the topic – Tito Boeri, Professor of Economics and Dean for Research at Bocconi University, Milan – stresses that temporary workers were especially hard hit during the Great Recession.