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Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach

Author

Listed:
  • Yenhuang Chen

    (Chinese Culture University)

  • Lihong Zhao

    (China HuanQiu Contracting & Engineering Corporation)

Abstract

This paper uses a new economic geography approach to examine the effects of wage subsidy, which is undertake to bolster up the industrial development. This paper also highlights the effects of trade liberalization and international capital mobility. In particular, sector-specific unemployment is introduced in the monopolistically competitive sector of the home country.

Suggested Citation

  • Yenhuang Chen & Lihong Zhao, 2009. "Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach," Economics Bulletin, AccessEcon, vol. 29(1), pages 426-436.
    • Handle: RePEc:ebl:ecbull:eb-08f20004
    as

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    References listed on IDEAS

    as
    1. Forslid, Rikard & Midelfart, Karen Helene, 2005. "Internationalisation, industrial policy and clusters," Journal of International Economics, Elsevier, vol. 66(1), pages 197-213, May.
    2. Neary, J Peter, 1981. "On the Harris-Todaro Model with Intersectoral Capital Mobility," Economica, London School of Economics and Political Science, vol. 48(191), pages 219-234, August.
    3. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
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    5. Tharakan, P. K. M., 1984. "Intra-industry trade between the industrial countries and the developing world," European Economic Review, Elsevier, vol. 26(1-2), pages 213-227.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    7. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    8. R. D. Husby, 1993. "The Minimum Wage, Wage Subsidies, And Poverty," Contemporary Economic Policy, Western Economic Association International, vol. 11(3), pages 30-38, July.
    9. repec:hhs:iuiwop:430 is not listed on IDEAS
    10. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    11. Neary, Peter, 1988. "Stability of the Mobile-Capital Harris-Todaro Model: Some Further Results," Economica, London School of Economics and Political Science, vol. 55(217), pages 123-127, February.
    12. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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    Cited by:

    1. Zierahn, Ulrich, 2012. "Monocentric cities, endogenous agglomeration, and unemployment disparities," HWWI Research Papers 130, Hamburg Institute of International Economics (HWWI).
    2. Ulrich Zierahn, 2013. "Agglomeration, congestion, and regional unemployment disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 435-457, October.
    3. Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).

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    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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