W. Arthur Lewis

W. Arthur Lewis was a Saint Lucian economist whose theories of economic development, especially the dual-sector model, helped shape development economics. He shared the 1979 Nobel Memorial Prize in Economic Sciences.

Dual-sector model: An economic model in which a traditional, low-productivity sector supplies labor to a modern, higher-productivity sector. Lewis’s best-known theory explains development through labor transfer between these sectors.
Lewis turning point: The point at which a developing economy’s supply of surplus labor is exhausted and wages begin to rise. It marks the transition from abundant labor to rising labor costs in Lewis’s account.
Theodore W. Schultz: An American economist who studied agriculture, human capital, and economic development. Schultz shared the 1979 economics Nobel with Lewis for work on development economics.
Neoclassical growth model: A framework explaining economic growth through capital, labor, technology, and diminishing returns. Unlike Lewis’s surplus-labor account, it commonly models labor markets without a distinct traditional sector.
Development economics: The study of how economies can improve living standards and overcome poverty and structural constraints. Lewis helped establish its modern focus on structural change and labor allocation.
Surplus labor: Labor whose removal from an activity initially causes little or no decline in its output. Lewis argued that such labor could move into modern industry without reducing traditional-sector production.
Subsistence wage: A wage level sufficient to sustain workers at a basic standard of living. Lewis used a roughly constant wage to explain why modern employers could hire abundant rural labor.
Gustav Ranis: An economist known for research on economic development and structural change. Ranis developed a prominent formal extension of the Lewis model with John Fei.
Harris–Todaro model: A model explaining rural-to-urban migration through expected urban wages and the probability of employment. It addresses migration and urban unemployment that the basic Lewis framework handles less directly.
Industrialization: The expansion of manufacturing and other large-scale productive activities in an economy. Lewis’s account made industrial investment and employment central to development strategy.

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