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Foreign enclaves, informal sector and urban unemployment: A theoretical analysis

  • Bandopadhyay, Titas Kumar

ABSTRACT :- We consider a small open Harris-Todaro economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. Different types of immobility and mobility of capital are assumed in different sections of this paper. We also analyse the effects of expansion of foreign enclave on urban unemployment and on domestic factor income. In many cases, we get the results opposite to that obtained in the young-Miyagiwa model.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3136.

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Date of creation: Apr 2002
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Handle: RePEc:pra:mprapa:3136
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  12. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
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  19. Gupta, Manash Ranjan, 1995. "Tax on foreign capital income and wage subsidy to the urban sector in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 47(2), pages 469-479, August.
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  24. Chandra, Vandana & Khan, M Ali, 1993. "Foreign Investment in the Presence of an Informal Sector," Economica, London School of Economics and Political Science, vol. 60(237), pages 79-103, February.
  25. Manjusri Bandyopadhyay & Manas Gupta, 1995. "Development policies in the presence of an informal sector: A note," Journal of Economics, Springer, vol. 61(3), pages 301-315, October.
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