TY - BOOK ID - 84540248 TI - Labor Market Segmentation in a Two-Sector Model of An Open Economy PY - 1990 SN - 1462398499 1455238368 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Currency KW - Demand and Supply of Labor: General KW - Foreign Exchange KW - Foreign exchange KW - Income economics KW - Labor market KW - Labor markets KW - Labor KW - Labour KW - Real exchange rates KW - Real wages KW - Unemployment KW - Unemployment: Models, Duration, Incidence, and Job Search KW - Wages KW - Wages, Compensation, and Labor Costs: General KW - Colombia UR - https://www.unicat.be/uniCat?func=search&query=sysid:84540248 AB - The paper examines formally the effects of labor market segmentation in a two-sector open economy model. The model demonstrates how the structure of the labor market affects the real exchange rate, defined as the relative price of traded and home goods, and is then used to examine the effects of two common labor market policies: increasing the degree of primary market coverage, and implementing wage restraint in the primary market. It is shown that increasing the degree of primary market coverage increases unemployment and leads to a real appreciation. Real wage restraint in the primary market, on the other hand, reduces unemployment, and has ambiguous but probably small effects on the real exchange rate. ER -