IDEAS home Printed from https://ideas.repec.org/a/bpj/bejtec/v17y2017i1p9n9.html
   My bibliography  Save this article

Welfare Analysis in an Extended Harris-Todaro Model: An Application of the Atkinson Theorem

Author

Listed:
  • Kingi Hautahi

    (Cornell University, Ithaca, NY 14853–0001, USA)

Abstract

I analyze the welfare effects of a policy of modern sector enlargement (MSENL), and a policy of increasing the efficiency of on-the-job search from the urban informal sector (IEOS) in a generalized Harris-Todaro model. I show that MSENL causes a Lorenz worsening of the income distribution and IEOS causes a Lorenz improvement. In a rare direct application of the Atkinson theorem, I conclude that MSENL decreases social welfare and IEOS increases social welfare for all anonymous, increasing and Schur-concave social welfare functions.

Suggested Citation

  • Kingi Hautahi, 2017. "Welfare Analysis in an Extended Harris-Todaro Model: An Application of the Atkinson Theorem," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 17(1), pages 1-9, January.
    • Handle: RePEc:bpj:bejtec:v:17:y:2017:i:1:p:9:n:9
    DOI: 10.1515/bejte-2015-0132
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejte-2015-0132
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejte-2015-0132?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fields, Gary S., 1989. "On-the-job search in a labor market model : Ex ante choices and ex post outcomes," Journal of Development Economics, Elsevier, vol. 30(1), pages 159-178, January.
    2. World Bank, 2012. "World Development Report 2013 [Rapport sur le développement dans le monde 2013]," World Bank Publications - Books, The World Bank Group, number 11843.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    4. Dutta, Bhaskar, 2002. "Chapter 12 Inequality, poverty and welfare," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 12, pages 597-633, Elsevier.
    5. Fields, Gary S., 2005. "A welfare economic analysis of labor market policies in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 76(1), pages 127-146, February.
    6. World Bank, 2012. "World Development Report 2012 [Rapport sur le développement dans le monde 2012]," World Bank Publications - Books, The World Bank Group, number 4391.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).
    2. Xavier Oudin & Laure Pasquier-Doumer & Thai Pham Minh & François Roubaud & Dat Vu Hoang, 2014. "Adjustment of the Vietnamese Labour Market in Time of Economic fluctuations and Structural Changes," Working Papers DT/2014/04, DIAL (Développement, Institutions et Mondialisation).
    3. Sofia Amaral & Siddhartha Bandyopadhyay & Rudra Sensarma, 2015. "Public Work Programs and Gender-based Violence: The Case of NREGA in India," Discussion Papers 15-09, Department of Economics, University of Birmingham.
    4. Ugo Panizza, 2023. "State-owned commercial banks," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 26(1), pages 44-66, January.
    5. Anuli Regina Ogbuagu & Dennis Brown Ewubare, 2015. "Financial Integration, Exchange Rate Stability and Macroeconomic Variables in Nigeria: ¡°A Structural Impact¡±," Research in World Economy, Research in World Economy, Sciedu Press, vol. 6(3), pages 36-54, September.
    6. Otubu, Osaretin Paul, 2020. "Public Expenditure and Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(6), pages 612-620, June.
    7. Lucio Esposito & Sunil Mitra Kumar & Adrián Villaseñor, 2020. "The importance of being earliest: birth order and educational outcomes along the socioeconomic ladder in Mexico," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(3), pages 1069-1099, July.
    8. Vito Peragine & Flaviana Palmisano & Paolo Brunori, 2014. "Economic Growth and Equality of Opportunity," The World Bank Economic Review, World Bank, vol. 28(2), pages 247-281.
    9. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    10. Bérenger Valérie & Audrey Verdier‐Chouchane, 2016. "Working Paper 230 - Child Labour and Schooling in South Sudan and Sudan: Is There a Gender Preference?," Working Paper Series 2323, African Development Bank.
    11. Ms. Era Dabla-Norris & Giang Ho & Ms. Annette J Kyobe, 2016. "Structural Reforms and Productivity Growth in Emerging Market and Developing Economies," IMF Working Papers 2016/015, International Monetary Fund.
    12. Bossavie, Laurent & Görlach, Joseph-Simon & Özden, Çağlar & Wang, He, 2024. "Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh," World Development, Elsevier, vol. 176(C).
    13. Admasu Shiferaw & Degol Hailu, 2016. "Job creation and trade in manufactures: industry-level analysis across countries," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-36, December.
    14. de Haan, Arjan & Foa, Roberto, 2014. "Indices of social development and their application to Africa," WIDER Working Paper Series 132, World Institute for Development Economic Research (UNU-WIDER).
    15. Auriol, Emmanuelle & Platteau, Jean-Philippe & Camilotti, Giula, 2017. "Eradicating Women-Hurting Customs: What Role for Social Engineering?," CEPR Discussion Papers 12107, C.E.P.R. Discussion Papers.
    16. Afridi, Farzana & Mukhopadhyay, Abhiroop & Sahoo, Soham, 2012. "Female Labour Force Participation and Child Education in India: The Effect of the National Rural Employment Guarantee Scheme," IZA Discussion Papers 6593, Institute of Labor Economics (IZA).
    17. Jeyapraba Suresh, 2023. "Poverty is Lack of Capabilities: A Literature Review," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(3), pages 462-476, March.
    18. Otker-Robe, Inci & Podpiera, Anca Maria, 2013. "The social impact of financial crises: evidence from the global financial crisis," Policy Research Working Paper Series 6703, The World Bank.
    19. Wolfgang Keller & Hale Utar, 2022. "Globalization, Gender, and the Family," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 3381-3409.
    20. Sharma, Rajesh & Sinha, Avik & Kautish, Pradeep, 2021. "Do economic endeavors complement sustainability goals in the emerging economies of South and Southeast Asia?," MPRA Paper 108163, University Library of Munich, Germany, revised 2021.

    More about this item

    Keywords

    Lorenz curves; segmented labor markets; inequality; welfare;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:17:y:2017:i:1:p:9:n:9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.