ABSTRACT
An old tradition in the literature on economic development represented most notably by Lewis (1954) views a developing economy as ‘a dual economy’ in which a relatively small part of the labour force is employed in a high productivity ‘advanced’, ‘modern’ or ‘formal’ sector, and a large majority are forced to seek their livelihood in a low productivity ‘backward’, ‘traditional’ or ‘informal’ sector. Viewed from this perspective, the process of economic development consists of generating a sufficiently high rate of growth of employment in the high productivity sector, allowing for a sustained rise in its share of employment.
