On labour market dualism in the Lewis model: A comment

In a special issue of this journal commemorating the 50th anniversary of W. Arthur Lewis's (The Manchester School, Vol. 28 (1954), No. 2, pp. 139-191) seminal paper, the Lewis model is treated as a model of labour market dualism (Fields, The Manchester School, Vol. 72 (2004), No. 6, pp. 724-735). This interpretation is flawed for a number of reasons. First, it overemphasizes the role ascribed by Lewis to intersectoral earnings differentials in his original model. Second, it fails to acknowledge that a major shortcoming of the model was its inability to account for the widening intersectoral earnings differential observed across a wide range of developing economies. For Lewis himself this was one of the 'major theoretical puzzles of the period' (1979, p. 150). Third, it ignores Lewis's subsequent revision of the model (Lewis, The Manchester School, Vol. 47 (1979), No. 3, pp. 211-229) that, ironically, incorporates a dual labour market to resolve this puzzle. However, for Lewis the critical issue was dualism within the modern sector, not, as Fields understands it, labour market dualism between the modern and traditional sectors. Fields's appreciation of the contribution of the Lewis model to understanding the process of wage determination in developing economies is therefore misplaced.

Fixed wages and bonuses in agency contracts: the case of a continuous state space

In this paper, we extend the state-contingent production approach to principal–agent problems to the case where the state space is an atomless continuum. The approach is modelled on the treatment of optimal tax problems. The central observation is that, under reasonable conditions, the optimal contract may involve a fixed wage with a bonus for above-normal performance. This is analogous to the phenomenon of "bunching" at the bottom in the optimal tax literature.

The state-contingent approach to production under uncertainty

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal-agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach.

Rethinking the labour movement in the "new South Africa"

The socio-economic system underpinning apartheid in South Africa was based on the exploitation of black workers in the mines, the factories, the fields and the shops. It is widely recognized that the struggles of the South African black working class contributed decisively to the overthrow of the racist regime. In recognition of the power of organised labour, the democratic government elected in 1994 granted South Africa's unions unprecedented legal and constitutional rights. However, despite these gains, the country's labour movement has been facing a fresh set of challenges, from macroeconomic policy to the factory floor, many of them emanating from labour’s political allies in Government. The purpose of this book is to examine how the South African labour movement is responding to these challenges in the new millennium. A variety of experts on South African labour, both within the country and outside deal with crucial issues: How has South Africa's labour movement reacted to the ANC Government's neoliberal economic agenda? How do the unions relate to an increasingly diversifying, “flexible” and vulnerable workforce? What are labour’s prospects of contributing to a left project in democratic South Africa? What are the challenges facing the unions in relation to new forms of militancy and social movements?

Neoliberalism, Gender Inequality and the Australian Labour Market

Over the past 25 years neoliberal philosophies have increasingly informed labour market policies in Australia that have led to increasing levels of wage decentralization. The most recent industrial relations changes aim to decentralize wage setting significantly further than has previously been the case. We argue that this is problematic for gender equity as wage decentralization will entrench rather than challenge the undervaluation of feminized work. In this article we provide an overview of key neoliberal industrial relations policy changes pertinent to gender equity and examine the current state of gender equity in the labour market. Results show that women's labour force participation has steadily increased over time but that a number of negative trends exclude women with substantial caring responsibilities from pursuing a career track. The implications of increasing levels of wage deregulation are that gender wage inequality and the potential for discrimination will grow.

The importance of considering social issues in reforestation schemes

This paper reports the results of a survey of north Queensland landholder attitudes with respect to a number of issues relating to participation in forestry. The survey explored the reasons why landholders plant trees, perceived obstacles to greater farm forestry, and attitudes to tree planting programs such as the Community Rainforest Reforestation Program (CRRP) and Private Joint Venture Scheme (PJVS). The results of the survey are discussed in the context of possible policy prescriptions that can be made at local, state and federal government levels to facilitate greater tree planting in the region. Many of the problems faced by local landholders are shared by landholders in other parts of Australia and throughout the world. This survey can thus serve as a case study, providing information on a number of issues concerning small-scale forestry policies that are of general relevance to the development of farm forestry programs.