Takeuchi, Nobuyuki (2012): Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences.
Download (87kB) | Preview
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|
|Original Title:||Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences|
|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
|Depositing User:||Nobuyuki Takeuchi|
|Date Deposited:||14 Jun 2012 16:30|
|Last Modified:||17 Jun 2016 15:52|
Choi, J.Y., Yu, E.S.H., 2006. Industrial targeting and non-shiftable capital in the Harris-Todaro model. Review of International Economics 14, 910–921.
Corden, W.M., Findlay, R., 1975. Urban unemployment, intersectoral capital mobility and development policy. Economica 42, 59–78.
Echevarria, E.C., 1997. Changes in sectoral composition associated with economic growth. International Economic Review 38, 431–52.
Harris, J.R., Todaro, M.P., 1970. Migration, unemployment & development: A two-sector analysis. American Economic Review 60, 126–42.
Kongsamut, P., Rebelo, S., Xie, D., 2001. Beyond balanced growth. Review of Economic Studies 68, 869–82.
Matsuyama, K., 2008. Structural change, in: Durlauf, S., Blume, L. (Eds.), New Palgrave Dictionary of Economics, 2nd ed. Palgrave Macmillan. http://www.dictionaryofeconomics.com/article?id=pde2008_S000440 (last accessed May 11, 2012).
Temple, J., 2005. Growth and wage inequality in a dual economy. Bulletin of Economic Research 57, 145–169.