ABSTRACT

This chapter discusses the pressing problem of unemployment in the contemporary developing world is studied from an historical perspective of transition growth. This problem is investigated for a particular type of LDC, namely, the open dualistic labour surplus economy. The post-war experience of Taiwan and Korea were analyzed from this viewpoint, emphasizing the fine differences as well as the family resemblance among these countries. As ex-Japanese colonies, both these countries shared a relatively strong agricultural infrastructure and the open dualistic and labour surplus characteristic at the beginning of the transition in the 1950s. In transition process of a labour surplus open dualistic economy, the solution of the unemployment problem may be identified with the arrival of the commercialization point which signifies the termination of the labour surplus condition inherited from the colonial epoch. In the context of a labour surplus dualistic economy, the real wage in terms of agricultural goods may be thought of as the institutional real wage (IRW).