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Urban Pollution, Unemployment and National Welfare in a Dualistic Economy

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  • Makoto Tawada
  • Shuqin Sun

Abstract

This paper undertakes a comparative static analysis in the Harris–Todaro (H–T) model by accommodating local pollution. Unlike in the classical H–T model where migration proceeds in response to urban–rural differences in expected earnings, we consider labor movement taking place according to the difference in utility, which is influenced by the quality of the local environment. The paradoxical result is that an improvement in pollution‐abatement technology gives rise to an increase in urban unemployment and has no effect on the workers' aggregate welfare.

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  • Makoto Tawada & Shuqin Sun, 2010. "Urban Pollution, Unemployment and National Welfare in a Dualistic Economy," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 311-322, May.
    • Handle: RePEc:bla:rdevec:v:14:y:2010:i:2:p:311-322
    DOI: 10.1111/j.1467-9361.2010.00554.x
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    References listed on IDEAS

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    Cited by:

    1. Azusa Nakamura, 2020. "Environmental disparities in an urban area, rural–urban migration, and urban unemployment," Asia-Pacific Journal of Regional Science, Springer, vol. 4(2), pages 463-477, June.
    2. Pengqing Zhang, 2019. "Skill formation, environmental pollution, and wage inequality," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(2), pages 405-424, April.
    3. Daisuke Matsuzaki & Yoshiyasu Ono, 2021. "Regional subsidies and interregional labor movement," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(3), pages 557-577, June.
    4. Kuo‐Hsing Kuo & Shang‐Fen Wu & Cheng‐Te Lee, 2022. "The impact of environmental policy on wage inequality," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(4), pages 472-485, December.
    5. Pi, Jiancai & Zhang, Pengqing, 2017. "Foreign capital, pollution control, and wage inequality in developing countries," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 280-288.
    6. Pan, Lijun & Zhou, Yu, 2013. "International factor mobility, environmental pollution and skilled–unskilled wage inequality in developing countries," Economic Modelling, Elsevier, vol. 33(C), pages 826-831.
    7. Xiaochun Li & Huanan Fu, 2023. "Agricultural producer service subsidies and agricultural pollution: An approach based on endogenous agricultural pollution," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1177-1198, May.
    8. Kenzo Abe & Muneyuki Saito, 2016. "Environmental Protection in the Presence of Unemployment and Common Resources," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 176-188, February.
    9. Azusa Nakamura, 2018. "Pollution from consumption and urban unemployment in a dual economy," Asia-Pacific Journal of Regional Science, Springer, vol. 2(1), pages 211-226, April.
    10. Chi-Chur Chao & Eden Siu Hung Yu, 2014. "Minimum Wage and Capital Taxes," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 195-202, May.
    11. Li, Xiaochun & Xu, Yuanting & Wang, Dianshuang, 2014. "Environment and labor movement of skilled labor and unskilled labor between sectors," Economic Modelling, Elsevier, vol. 38(C), pages 367-371.
    12. Huanan Fu & Xiaochun Li, 2023. "Rural–urban migrants’ remittance and agricultural pollution in the presence of agricultural dualism," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(2), pages 535-558, April.
    13. Dianshuang Wang & Hongyun Huang & Xin Zhao & Fang Fang, 2023. "Green technological progress, agricultural modernization, and wage inequality: Lessons from China," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1673-1698, August.
    14. Li, Xiaochun & Fu, Huanan & Wu, Yunyun, 2020. "Pollution mitigation, unemployment rate and wage inequality in the presence of agricultural pollution," China Economic Review, Elsevier, vol. 61(C).
    15. Dianshuang Wang, 2019. "Manufacturing and agricultural pollution, private mitigation and wage inequality in the presence of pollution externalities," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(2), pages 51-58.
    16. Yunyun Wu & Xiaochun Li, 2021. "International factor mobility and environment in a dual agricultural economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 75-89, February.
    17. Azusa Nakamura, 2013. "Special Issue. Guest Editor: Zhihao Yu," Review of Development Economics, Wiley Blackwell, vol. 17(3), pages 585-593, August.

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