Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences

Takeuchi, Nobuyuki (2012): Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences.

Abstract

We reconsider the effect of economic development on urban unemployment by introducing households with non-homothetic preferences into a sector-specific capital version of the Harris-Todaro model. Contrary to previous studies, this work shows that, while urban development reduces urban unemployment, rural development expands it. As for labor growth, it normally increases urban unemployment.

• Item Type: MPRA Paper
• Language: English
• Keywords: sector-specific capital; Harris-Todaro model; economic development; non-homothetic preference; urban unemployment
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J60 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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