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Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach

Author

Listed:
  • Yenhuang Chen

    () (Chinese Culture University)

  • Lihong Zhao

    () (China HuanQiu Contracting & Engineering Corporation)

Abstract

This paper uses a new economic geography approach to examine the effects of wage subsidy, which is undertake to bolster up the industrial development. This paper also highlights the effects of trade liberalization and international capital mobility. In particular, sector-specific unemployment is introduced in the monopolistically competitive sector of the home country.

Suggested Citation

  • Yenhuang Chen & Lihong Zhao, 2009. "Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach," Economics Bulletin, AccessEcon, vol. 29(1), pages 426-436.
  • Handle: RePEc:ebl:ecbull:eb-08f20004
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I1-P44.pdf
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    References listed on IDEAS

    as
    1. Neary, Peter, 1988. "Stability of the Mobile-Capital Harris-Todaro Model: Some Further Results," Economica, London School of Economics and Political Science, vol. 55(217), pages 123-127, February.
    2. Forslid, Rikard & Midelfart, Karen Helene, 2005. "Internationalisation, industrial policy and clusters," Journal of International Economics, Elsevier, vol. 66(1), pages 197-213, May.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Neary, J Peter, 1981. "On the Harris-Todaro Model with Intersectoral Capital Mobility," Economica, London School of Economics and Political Science, vol. 48(191), pages 219-234, August.
    5. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
    6. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    7. Tharakan, P. K. M., 1984. "Intra-industry trade between the industrial countries and the developing world," European Economic Review, Elsevier, vol. 26(1-2), pages 213-227.
    8. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    9. R. D. Husby, 1993. "The Minimum Wage, Wage Subsidies, And Poverty," Contemporary Economic Policy, Western Economic Association International, vol. 11(3), pages 30-38, July.
    10. repec:hhs:iuiwop:430 is not listed on IDEAS
    11. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    12. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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