Dual Sector Model

The dual- celestial sphere model 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 growing economy in terms of a labour transition amidst cardinal orbits, the capitalist bena and the subsistence sphere of influence. Assumptions 1. The model assumes that a developing economy has a supernumerary of unproductive labor in the agricultural sphere. 2. These workers are attracted to the increment manufacturing sector where higher lock are offered. 3. It also assumes that the wages in the manufacturing sector are more or slight restore. 4. Entrepreneurs in the manufacturing sector need profit because they charge a price above the fixed wage rate. 5. The model assumes that these gelt will be reinvested in the business in the spurt of fixed capital. 6. An advanced manufacturing sector means an economy has locomot e from a traditional to an industrialized one. [1] Relationship between the two sectors The primary relationship between the two sectors is that when the capitalist sector expands, it extracts or draws labor from the subsistence sector. This causes the issue per head of laborers who move from the subsistence sector to the capitalist sector to enlarge.

Since Lewis in his model considers overpopulated labor free economies he assumes that the bring show up of unskilled labor to the capitalist sector is unlimited. This gives rise to the surmisal of creating new industries and expanding subsisting ones at the exi sting wage rate. A epic portion of the unli! mited supply of labor consists of those who are in disguised unemployment in factory farm and in evidence over-manned occupations such as domestic operate casual jobs, lowly retail trading. Lewis also accounts for two other factors that cause an increase in the supply of unskilled labor, they are women in the kinfolk and population growth. The agricultural sector has a limited amount of land to...If you want to get a full essay, secern it on our website: BestEssayCheap.com

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