Formation of SEZ, Agricultural Productivity and Urban Unemployment

Chaudhuri, Sarbajit and Yabuuchi, Shigemi (2007): Formation of SEZ, Agricultural Productivity and Urban Unemployment.

Abstract

Formation of SEZ using agricultural land to promote industrialization has recently been one of most controversial policy issues in many developing economies including India. This paper critically theoretically evaluates the consequences of this policy in terms of a three-sector Harris-Todaro type general equilibrium model reasonable for a developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends more than a critical amount on irrigation projects and other infrastructural development designed for improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve.

• Item Type: MPRA Paper
• Institution: University of Calcutta
• Language: English
• Keywords: Special economic zone; fiscal concessions; agricultural productivity; rural wage; urban unemployment
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R14 - Land Use Patterns; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R13 - General Equilibrium and Welfare Economic Analysis of Regional Economies

References

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