This book examines the most important current issues surrounding the impact of increased international trade on domestic labour markets in both developed and Less Developed Countries, and the relationship between trade and employment.

The impact of increased levels of international trade on domestic labour markets is a key issue for policy makers in both developed and less developed countries. This book considers the most important current issues in this area in the context of models which examine the relationship between trade and employment. It is divided into three parts. The first deals with unemployment, decay and the Dutch Disease'; the second with structural adjustment, urban unemployment and protectionism; the last offers some variations on models of unemployment. In parts one and two the important insights are that minimum wages may cause decay rather than growth and that disaggregation of non-traded goods between urban and rural regions is of critical importance in structural adjustment, protectionism and the real exchange rate. In part three, segmented labour market theory is used to explain urban and disguised unemployment and the importancef of proper agricultural policies for rural development is emphasised.

Part I: Uniform Real Minimum Wage Rates, Unemployment, Decay and Dutch Disease 1. A Two-Sector Model of a Closed
Economy 2. Uniform Real Minimum Wage Rate, Unemployment, Growth and Decay 3. Booming Sector and the Dutch Disease with Unemployment Part II: Generalized Harris-Todaro Model, Structural Adjustment and Unemployment 4. Urban-Rural Structural Adjustment, Urban Unemployment with Traded and Non-Traded Goods 5. Protectionism and Industrialization in a Harris-Todaro Model with Non-Traded Goods 6. Tariffs, Terms of Trade, Unemployment and the Real Exchange Rate Part III: Further Variations on Models of Unemployment 7. Disguised Urban Unemployment and Welfare in a General Equilibrium Model with Segmented Labour Markets 8. Transfers, Structural Change, Welfare and Unemployment in a North-South Framework 9. Notes on Industrialization and Unemployment with Increasing Returns to Scale and Minimum Wages