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Foreign enclaves, informal sector and urban unemployment: A theoretical analysis

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Bandopadhyay, Titas Kumar

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Abstract

ABSTRACT :- We consider a small open Harris-Todaro economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. Different types of immobility and mobility of capital are assumed in different sections of this paper. We also analyse the effects of expansion of foreign enclave on urban unemployment and on domestic factor income. In many cases, we get the results opposite to that obtained in the young-Miyagiwa model.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3136.

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Date of creation: Apr 2002
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Handle: RePEc:pra:mprapa:3136

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Related research
Keywords: FOREIGN ENCLAVES INFORMAL SECTOR URBAN UNEMPLOYMENT

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses

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  1. Lundborg, Per, 1990. "Rural-urban migration and the transition from traditional to modern agriculture," Journal of Development Economics, Elsevier, vol. 33(2), pages 287-307, October. [Downloadable!] (restricted)
  2. Stark, Oded, 1982. "On modelling the informal sector," World Development, Elsevier, vol. 10(5), pages 413-416, May. [Downloadable!] (restricted)
  3. 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)
  4. Hamada, Koichi, 1974. "An economic analysis of the duty-free zone," Journal of International Economics, Elsevier, vol. 4(3), pages 225-241, August. [Downloadable!] (restricted)
  5. McCool, Thomas J, 1982. "Wage Subsidies and Distortionary Taxes in a Mobile Capital Harris-Todaro Model," Economica, London School of Economics and Political Science, vol. 49(193), pages 69-79, February. [Downloadable!] (restricted)
  6. Gupta, Manash Ranjan, 1994. "Foreign capital, income inequality and welfare in a Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 45(2), pages 407-414, December. [Downloadable!] (restricted)
  7. Chaudhuri, T. Datta & Adhikari, Smita, 1993. "Free trade zones with Harris-Todaro unemployment A note on Young-Miyagiwa," Journal of Development Economics, Elsevier, vol. 41(1), pages 157-162, June. [Downloadable!] (restricted)
  8. Quibria, M G, 1988. "Migration, Trade Unions, and the Informal Sector: A Note on Calvo," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(3), pages 557-63, August. [Downloadable!] (restricted)
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  11. Cole, William E & Sanders, Richard D, 1985. "Internal Migration and Urban Employment in the Third World," American Economic Review, American Economic Association, vol. 75(3), pages 481-94, June. [Downloadable!] (restricted)
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  13. Gupta, Manash Ranjan, 1995. "Tax on foreign capital income and wage subsidy to the urban sector in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 47(2), pages 469-479, August. [Downloadable!] (restricted)
  14. Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank. [Downloadable!]
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  15. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June. [Downloadable!] (restricted)
  16. Young, Leslie & Miyagiwa, Kaz F., 1987. "Unemployment and the formation of duty-free zones," Journal of Development Economics, Elsevier, vol. 26(2), pages 397-405, August. [Downloadable!] (restricted)
  17. 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)
  18. Beladi, H. & Marjit, S., 1992. "Foreign Capital and Protectionism," RCER Working Papers 310, University of Rochester - Center for Economic Research (RCER).
  19. Jones, Ronald W. & Easton, Stephen T., 1983. "Factor intensities and factor substitution in general equilibrium," Journal of International Economics, Elsevier, vol. 15(1-2), pages 65-99, August. [Downloadable!] (restricted)
  20. 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)
  21. Hamilton, Carl & E.O. Svensson, Lars, 1982. "On the welfare effects of a duty-free zone," Journal of International Economics, Elsevier, vol. 13(1-2), pages 45-64, August. [Downloadable!] (restricted)
  22. Hamid Beladi & Sugata Marjit, 1992. "Foreign Capital and Protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 233-38, February. [Downloadable!] (restricted)
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