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Rural-Urban Migration, the Informal Sector, Urban Unemployment, and Development Policies: A Theoretical Analysis

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  • Chaudhuri, Sarbajit

Abstract

This paper develops a theoretical model like Gupta's to show the simultaneous existence of the urban informal sector and open unemployment in the urban sector in a Harris-Todaro type of model of rural-urban migration. A wage or a price subsidy policy to the rural sector, or a demand management policy like an export promotional scheme in the manufacturing sector, reduces the urban unemployment level, and provides a theoretical basis for the introduction of export promotional measures like the formation of duty-free Export Processing Zones (EPZs) to solve the urban unemployment problem. The policy conclusions of the present paper are different from those found in Gupta's 1993 model. Copyright 2000 by Blackwell Publishing Ltd

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  • Chaudhuri, Sarbajit, 2000. "Rural-Urban Migration, the Informal Sector, Urban Unemployment, and Development Policies: A Theoretical Analysis," Review of Development Economics, Wiley Blackwell, vol. 4(3), pages 353-364, October.
  • Handle: RePEc:bla:rdevec:v:4:y:2000:i:3:p:353-64
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    Cited by:

    1. Mohamed Amara & Hatem Jemmali & Mohamed Ayadi, 2017. "Rural-Urban Migration and Income Disparity in Tunisia: A Decomposition Analysis," Working Papers 1085, Economic Research Forum, revised 04 2017.
    2. Subrata Ghatak & Alan Mulhern & John Watson, 2008. "Inter-Regional Migration in Transition Economies: The Case of Poland," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 209-222, February.
    3. Mauricio Santa María S. & Fabián García A. & Ana Virgina Mujica P., 2009. "Los costos no laborales y el mercado laboral: impacto de la reforma de salud en Colombia," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 009186, FEDESARROLLO.
    4. Pi Jiancai & Zhou Yu, 2015. "Rural Property Rights, Migration, and Welfare in Developing Countries," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 997-1029, July.
    5. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2003. "Free Education Policy and Trade Liberalization: Consequences on Child and Adult Labour Markets in a Small Open Economy," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 336-359.
    6. Mitra, Sudeshna & Gupta, Kausik, 2017. "Liberalization and Welfare Conditions of a Developing Economy: A General Equilibrium Analysis," MPRA Paper 85230, University Library of Munich, Germany.
    7. Katy Cornwell & Brett Inder, 2004. "Migration and Unemployment in South Africa: When Motivation Surpasses the Theory," Monash Econometrics and Business Statistics Working Papers 2/04, Monash University, Department of Econometrics and Business Statistics.
    8. Dwibedi, Jayanta & Chaudhuri, Sarbajit, 2011. "Poverty alleviation programs, FDI-led growth and child labour under agricultural dualism," MPRA Paper 29997, University Library of Munich, Germany.
    9. Chaudhuri, Sarbajit, 2011. "Economic recession, skilled unemployment and welfare," Economic Modelling, Elsevier, vol. 28(3), pages 1435-1440, May.
    10. Nobuyuki Takeuchi, 2015. "Reconsidering the effect of economic development on urban unemployment under nonhomothetic preferences," Economics Bulletin, AccessEcon, vol. 35(1), pages 313-321.
    11. Lay, Jann & Wiebelt, Manfred, 2001. "Towards a dual education system - a labour market perspective on poverty reduction in Bolivia," Kiel Working Papers 1073, Kiel Institute for the World Economy (IfW).
    12. Chaudhuri, Sarbajit, 2010. "Economic recession, demand constraint and labour markets in a developing economy," MPRA Paper 27433, University Library of Munich, Germany.
    13. Pi, Jiancai & Chen, Xuyang, 2016. "The impacts of capital market distortion on wage inequality, urban unemployment, and welfare in developing countries," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 103-115.
    14. Ghatak, Subrata & Mulhern, Alan & Watson, John, 2007. "Inter-regional migration in transition economies: the case of Poland," Economics Discussion Papers 2007-7, School of Economics, Kingston University London.
    15. Saracoglu, Durdane Sirin & Roe, Terry L., 2015. "Internal Migration, Structural Change, and Economic Growth," 2015 Conference, August 9-14, 2015, Milan, Italy 212690, International Association of Agricultural Economists.
    16. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2006. "Economic Liberalization and Informal Wage in a Small Open Economy: Does Capital Mobility count?," MPRA Paper 1353, University Library of Munich, Germany.
    17. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.

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