Title

Urban productivity, urban unemployment, and labor market policies.

SelectedWorks Author Profiles:

Thomas J. Carter

Document Type

Article

Publication Date

1998

ISSN

0166-0462

Abstract

Some important effects of government policies on urban labor productivity are absent from Harris and Todaro’s popular two-region development model. Revising their model using efficiency wages allows for these effects and for endogenous urban wages, employment, and unemployment. It also reverses many standard Harris–Todaro welfare and policy conclusions. For example, an urban wage increase raises welfare and income in both the urban and rural regions, even though the wage already exceeds the urban market-clearing rate and exceeds the rural wage. Income and welfare also rise with migration into the urban region, even though there are already unemployed workers there.

Comments

Citation only. Full-text article is available through licensed access provided by the publisher. Members of the USF System may access the full-text of the article through the authenticated link provided.

Publisher

Elsevier

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.