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Trade Reform, Capital Mobility, and Efficiency Wage in a Harris-Todaro Economy

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Author Info
Titas Kumar Bandopadhyay (Bagnan College, Bagnan, Howrah, West Bengal, India.)
Abstract

The main purpose of this paper is to analyse the impact of trade reform on unemployment and social welfare in a Harris-Todaro (1970) economy with efficiency wage and capital mobility. The analysis shows that capital mobility plays an important role to influence the impact of trade reform on unemployment and social welfare. We find that trade reform raises urban unemployment and produces an ambiguous effect on social welfare when capital is perfectly mobile among the three sectors. However, such policy lowers unemployment and raises social welfare when capital is imperfectly mobile.

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File URL: http://www.pide.org.pk/pdf/PDR/2007/Volume2/163-174.pdf
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Publisher Info
Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 46 (2007)
Issue (Month): 2 ()
Pages: 163-174
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Handle: RePEc:pid:journl:v:46:y:2007:i:2:p:163-174

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Related research
Keywords: Trade Reform; Capital Mobility; Efficiency Wage;

Find related papers by JEL classification:
F01 - International Economics - - General - - - Global Outlook
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

References listed on IDEAS
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    Other versions:
  10. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-18, November. [Downloadable!] (restricted)
    Other versions:
  11. Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
  12. Marcouiller, Douglas & Young, Leslie, 1995. "The Black Hole of Graft: The Predatory State and the Informal Economy," American Economic Review, American Economic Association, vol. 85(3), pages 630-46, June. [Downloadable!] (restricted)
  13. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2005. "Free Education Policy And Trade Liberalization: Consequences On Child And Adult Labour Markets In A Small Open Economy," Labor and Demography 0510018, EconWPA. [Downloadable!]
  14. Bhagwati, Jagdish N. & Srinivasan, T. N., 1977. "Education in a `job ladder' model and the fairness-in-hiring rule," Journal of Public Economics, Elsevier, vol. 7(1), pages 1-22, February. [Downloadable!] (restricted)
  15. Manjusri Bandyopadhyay & Manas Gupta, 1995. "Development policies in the presence of an informal sector: A note," Journal of Economics, Springer, vol. 61(3), pages 301-315, October. [Downloadable!] (restricted)
  16. Chandra, Vandana & Khan, M Ali, 1993. "Foreign Investment in the Presence of an Informal Sector," Economica, London School of Economics and Political Science, vol. 60(237), pages 79-103, February. [Downloadable!] (restricted)
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