Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences
AbstractWe reconsider the effect of economic development on urban unemployment by introducing households with non-homothetic preferences into a sector-specific capital version of the Harris-Todaro model. Contrary to previous studies, this work shows that, while urban development reduces urban unemployment, rural development expands it. As for labor growth, it normally increases urban unemployment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39378.
Date of creation: Jun 2012
Date of revision:
sector-specific capital; Harris-Todaro model; economic development; non-homothetic preference; urban unemployment;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-FDG-2012-06-25 (Financial Development & Growth)
- NEP-LAB-2012-06-25 (Labour Economics)
- NEP-URE-2012-06-25 (Urban & Real Estate Economics)
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