Final answer:
The dual sector economy, proposed by economist Sir W. Arthur Lewis, explores the difference in marginal productivity between low-skilled workers in the manufacturing and agricultural sectors. The theory suggests that the marginal product is greater in manufacturing due to the higher demand for low-skilled labor. This can lead to a large-scale transition of the labor force.
Step-by-step explanation:
The dual sector economy is a theoretical framework proposed by economist Sir W. Arthur Lewis. It suggests that the marginal product of low-skilled workers is higher in the manufacturing sector compared to the agricultural sector. This is because manufacturing sectors have a greater need for low-skilled workers and can make better use of their labor. In agricultural societies, the marginal product of additional farmers is nearly zero due to fixed inputs, creating a surplus of workers.
In this dual economy, the wages of low-skilled workers in the manufacturing sector will remain low but more consistent. This can lead to a large-scale transition of the labor force from the agricultural to the manufacturing sector. However, it's important to note that economic transitions are not without downsides. Agricultural sectors may face competition from manufacturing, and farming economies can suffer downturns and unpredictability as people leave rural areas. Migration or immigration may be encouraged to compensate for the missing labor in agriculture, leading to potential conflicts.