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Foreign Investment, Urban Unemployment, and Informal Sector

Author

Listed:
  • Yabuuchi, Shigemi

    (Nagoya City University)

  • Hamid, Hamid

    (North Dakota State University)

Abstract

In this paper we extend the Harris-Todaro model to include an urban informal sector. The effects of exogenous inflow of foreign capital on outputs, unemployment and welfare are examined in the model where the product of the informal sector is used as an industrial input in the urban formal sector. We also analyze the implications of the capital inflow for income distribution.

Suggested Citation

  • Yabuuchi, Shigemi & Hamid, Hamid, 2005. "Foreign Investment, Urban Unemployment, and Informal Sector," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 123-138.
    • Handle: RePEc:ris:integr:0309
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    Citations

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    Cited by:

    1. Titas Kumar Bandopadhyay, 2007. "Trade Reform, Capital Mobility, and Efficiency Wage in a Harris-Todaro Economy," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(2), pages 163-174.
    2. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    3. Rashmi Ahuja, 2021. "Sectoral allocation of foreign capital inflows and skilled‐unskilled wage inequality in a developing economy: A theoretical model," Manchester School, University of Manchester, vol. 89(1), pages 86-101, January.
    4. Sarbajit Chaudhuri & Shigemi Yabuuchi & Ujjaini Mukhopadhyay, 2006. "Inflow Of Foreign Capital And Trade Liberalization In A Model With An Informal Sector And Urban Unemployment," Pacific Economic Review, Wiley Blackwell, vol. 11(1), pages 87-103, February.

    More about this item

    Keywords

    Harris-Todaro model; Foreign investment; Welfare;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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