This paper develops a formal growth model in which there is a dual labour market. Unlike most developed countries where the neoclassical labour market might be a reasonable approximation, many developing countries have a large number of under-utilized labourers in the agricultural sector, and gradual industrial development does not drive up the wage level (Lewis, 1954). Lewis (1954) proposed a dual economy framework characterized by the separation of the modern industrial sector from the traditional agricultural sector. Labour in the traditional agricultural sector is plentiful, frequently having low or even zero marginal product, while in the modern industrial sector labour has a positive marginal product. The modern industrial sector's wage is determined by their marginal product but in the traditional agricultural sector, people's income level is determined by their