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The Harris-Todaro Hypothesis

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Author Info
Khan, M. Ali Khan
Abstract

The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 2201.

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Date of creation: 2007
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Handle: RePEc:pra:mprapa:2201

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Related research
Keywords: Harris-Todaro Wages Labour Economics Labour Market Rural to Urban Migration

Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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  1. Sarbajit Chaudhuri, 2003. "How and how far to liberalize a developing economy with informal sector and factor market distortions," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 12(4), pages 403-428, December. [Downloadable!] (restricted)
  2. Chaudhuri, Sarbajit & Mukherjee, Ujjaini, 2002. "Removal of protectionism, foreign investment and welfare in a model of informal sector," Japan and the World Economy, Elsevier, vol. 14(1), pages 101-116, January. [Downloadable!] (restricted)
    Other versions:
  3. Kar, Saibal & Marjit, Sugata, 2001. "Informal sector in general equilibrium: welfare effects of trade policy reforms," International Review of Economics & Finance, Elsevier, vol. 10(3), pages 289-300, July. [Downloadable!] (restricted)
  4. Marjit, Sugata, 1991. "Agro-based industry and rural-urban migration : A case for an urban employment subsidy," Journal of Development Economics, Elsevier, vol. 35(2), pages 393-398, April. [Downloadable!] (restricted)
  5. Khan, M. Ali & Naqvi, Syed Nawab Haider, 1983. "Capital markets and urban unemployment," Journal of International Economics, Elsevier, vol. 15(3-4), pages 367-385, November. [Downloadable!] (restricted)
  6. Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February. [Downloadable!] (restricted)
  7. Srinivasan, T. N. & Bhagwati, Jagdish, 1975. "Alternative policy rankings in a large, open economy with sector-specific, minimum wages," Journal of Economic Theory, Elsevier, vol. 11(3), pages 356-371, December. [Downloadable!] (restricted)
  8. Khan, M Ali, 1991. "Ethnic Groups and the Heckscher-Ohlin-Samuelson Trade Model," Economic Theory, Springer, vol. 1(4), pages 355-71, October.
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  10. Chao, Chi-Chur & Yu, Eden S. H., 1995. "The shadow price of foreign exchange in a dual economy," Journal of Development Economics, Elsevier, vol. 46(1), pages 195-202, February. [Downloadable!] (restricted)
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  14. Fields, Gary S., 2005. "A welfare economic analysis of labor market policies in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 76(1), pages 127-146, February. [Downloadable!] (restricted)
  15. Chi-Chur Chao & Eden S. H. Yu, 1997. "Trade Liberalization in Oligopolistic Competition with Unemployment: A General Equilibrium Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 479-96, May. [Downloadable!] (restricted)
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    Other versions:
  17. J. Bhagwati & T. N. Srinivasan, 1973. "The Ranking of Policy Interventions Under Factor Market Imperfections: The Case of Sector-Specific Sticky Wages and Unemployment," Working papers 100, Massachusetts Institute of Technology (MIT), Department of Economics.
  18. Agesa, Richard U, 2000. "The Incentive for Rural to Urban Migration: A Re-examination of the Harris-Todaro Model," Applied Economics Letters, Taylor and Francis Journals, vol. 7(2), pages 107-10, February. [Downloadable!] (restricted)
  19. Sen, Partha & Ghosh, Arghya & Barman, Abheek, 1997. "The Possibility of Welfare Gains with Capital Inflows in a Small Tariff-Ridden Economy," Economica, London School of Economics and Political Science, vol. 64(254), pages 345-52, May. [Downloadable!] (restricted)
  20. Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
  21. Chao, Chi-Chur & Yu, Eden S. H., 1994. "Foreign capital inflows and welfare in an economy with imperfect competition," Journal of Development Economics, Elsevier, vol. 45(1), pages 141-154, October. [Downloadable!] (restricted)
  22. Bourguignon, Francois, 1990. "Growth and Inequality in the Dual Model of Development: The Role of Demand Factors," Review of Economic Studies, Blackwell Publishing, vol. 57(2), pages 215-28, April. [Downloadable!] (restricted)
  23. Chakravarty, Satya R. & Dutta, Bhaskar, 1990. "Migration and welfare," European Journal of Political Economy, Elsevier, vol. 6(1), pages 119-138, August. [Downloadable!] (restricted)
  24. Fields, Gary S., 1997. "Wage floors and unemployment: A two-sector analysis," Labour Economics, Elsevier, vol. 4(1), pages 85-91, March. [Downloadable!] (restricted)
  25. 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!]
  26. Moene, Karl Ove, 1988. "A reformulation of the Harris-Todaro mechanism with endogenous wages," Economics Letters, Elsevier, vol. 27(4), pages 387-390. [Downloadable!] (restricted)
  27. 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)
  28. Jones, Ronald W, 1971. "Distortions in Factor Markets and the General Equilibrium Model of Production," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 437-59, May-June. [Downloadable!] (restricted)
  29. Bhagwati, Jagdish N & Srinivasan, T N, 1974. "On Reanalyzing the Harris-Todaro Model: Policy Rankings in the Case of Sector-Specific Sticky Wages," American Economic Review, American Economic Association, vol. 64(3), pages 502-08, June. [Downloadable!] (restricted)
    Other versions:
  30. Chow, Ying-Foon & Zeng, Jinli, 2001. "Foreign Capital in a Neoclassical Model of Growth," Applied Economics Letters, Taylor and Francis Journals, vol. 8(9), pages 613-15, September. [Downloadable!] (restricted)
  31. Grossman, Gene M., 1983. "Partially mobile capital : A general approach to two-sector trade theory," Journal of International Economics, Elsevier, vol. 15(1-2), pages 1-17, August. [Downloadable!] (restricted)
  32. 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)
  33. Beladi, Hamid & Naqvi, Nadeem, 1988. "Urban unemployment and non-immiserizing growth," Journal of Development Economics, Elsevier, vol. 28(3), pages 365-376, May. [Downloadable!] (restricted)
  34. Grinols, Earl L, 1991. "Unemployment and Foreign Capital: The Relative Opportunity Costs of Domestic Labour and Welfare," Economica, London School of Economics and Political Science, vol. 58(229), pages 107-21, February. [Downloadable!] (restricted)
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