The Harris-Todaro Hypothesis

M. Khan

Labor Economics Working Papers from East Asian Bureau of Economic Research

Abstract: The Harris-Todaro hypothesis replaces the equality of wages by the equality of expected wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups.

Keywords: Harris-Todaro; Wages; labour economics; Labour Market; Rural to Urban Migration (search for similar items in EconPapers)
Date: 2007-01
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Harris-Todaro Hypothesis (2007)
Working Paper: The Harris-Todaro Hypothesis (2007)
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