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Urban Pollution, Unemployment and National Welfare in a Dualistic Economy

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  • Makoto Tawada
  • Shuqin Sun
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    Abstract

    This paper undertakes a comparative static analysis in the Harris-Todaro (H-T) model by accommodating local pollution. Unlike in the classical H-T model where migration proceeds in response to urban-rural differences in expected earnings, we consider labor movement taking place according to the difference in utility, which is influenced by the quality of the local environment. The paradoxical result is that an improvement in pollution-abatement technology gives rise to an increase in urban unemployment and has no effect on the workers' aggregate welfare. Copyright � 2010 Blackwell Publishing Ltd.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Review of Development Economics.

    Volume (Year): 14 (2010)
    Issue (Month): 2 (05)
    Pages: 311-322

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    Handle: RePEc:bla:rdevec:v:14:y:2010:i:2:p:311-322

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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    Cited by:
    1. Pan, Lijun & Zhou, Yu, 2013. "International factor mobility, environmental pollution and skilled–unskilled wage inequality in developing countries," Economic Modelling, Elsevier, vol. 33(C), pages 826-831.

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