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Privatization, Unemployment, and Welfare in the Harris-Todaro Model with a Mixed Duopoly

Author

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  • Pi Jiancai

    (Department of Economics, Nanjing University, 22 Hankou Road, Nanjing 210093, P. R. China)

  • Yin Jun

    (Department of Economics, Nanjing University, 22 Hankou Road, Nanjing 210093, P. R. China)

Abstract

This paper explores the unemployment and welfare effects of privatization through the Harris-Todaro model with a mixed duopoly. Our approach is more generalized than the existing literature. When capital is sector-specific (i. e., it is in the short run), an increase in the degree of partial privatization will raise the unemployment rate, but the change of social welfare is conditional on the market share of the public firm and the relative degree of partial privatization. When capital is sector-mobile (i. e., it is in the long run), an increase in the degree of partial privatization will reduce the unemployment rate, but the change of social welfare is also dependent on the market share of the public firm and the relative degree of partial privatization. Our results capture the fact that the public firm and the private firm usually coexist in a competitive environment in the real world.

Suggested Citation

  • Pi Jiancai & Yin Jun, 2016. "Privatization, Unemployment, and Welfare in the Harris-Todaro Model with a Mixed Duopoly," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-12, October.
    • Handle: RePEc:bpj:bejeap:v:16:y:2016:i:4:p:12:n:13
    DOI: 10.1515/bejeap-2016-0016
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    Cited by:

    1. Jiancai Pi & Shuning Li, 2022. "Managerial Delegation and Wage Inequality," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 141-157, May.
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    3. Jiancai Pi & Xinyi Liu & Jun Yin, 2025. "The impacts of privatization on employment, wages, and welfare in the presence of an informal sector," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-28, March.
    4. Jiancai Pi & Shuxi Duan, 2023. "Appropriation, migration, and unemployment," Australian Economic Papers, Wiley Blackwell, vol. 62(3), pages 430-456, September.

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    More about this item

    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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