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Environment and the Harris and Todaro Paradoxes

In: International Trade and Economic Dynamics

Author

Listed:
  • Makoto Tawada

    (Nagoya University)

  • Azusa Nakamura

    (Gifu Shotoku Gakuen University, 1-38)

Abstract

There are two well-known paradoxical results in the Harris and Todaro model. One is that subsidization policies for the manufacturing sector are not effective, but those for the agricultural sector are effective for reducing urban unemployment. The other is that unemployment expands as a result of an increase in the capital endowment, but contracts as a result of an increase in the labor endowment. In the present analysis, environmental elements are introduced into the model, and we show that a decrease in the discharge rate of pollution may enhance urban unemployment, while the paradoxical results that occur with a change in the factor endowment disappear.

Suggested Citation

  • Makoto Tawada & Azusa Nakamura, 2009. "Environment and the Harris and Todaro Paradoxes," Springer Books, in: Takashi Kamihigashi & Laixun Zhao (ed.), International Trade and Economic Dynamics, pages 87-99, Springer.
  • Handle: RePEc:spr:sprchp:978-3-540-78676-4_10
    DOI: 10.1007/978-3-540-78676-4_10
    as

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