Reconsidering the effect of economic development on urban unemployment under non-homothetic preferences

Nobuyuki Takeuchi

MPRA Paper from University Library of Munich, Germany

Abstract: We reconsider the effect of economic development on urban unemployment by introducing households with non-homothetic preferences into a sector-specific capital version of the Harris-Todaro model. Contrary to previous studies, this work shows that, while urban development reduces urban unemployment, rural development expands it. As for labor growth, it normally increases urban unemployment.

Keywords: sector-specific capital; Harris-Todaro model; economic development; non-homothetic preference; urban unemployment (search for similar items in EconPapers)
JEL-codes: J60 O10 O15 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-fdg, nep-lab and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39378

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