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Reconsidering the effect of economic development on urban unemployment under nonhomothetic preferences

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  • Nobuyuki Takeuchi

    (Graduate School of International Cooperation Studies, Kobe University)

Abstract

We reconsider the effect of economic development on urban unemployment by introducing households with nonhomothetic preferences into a sector-specific capital version of the Harris–Todaro model. Contrary to previous studies, this work shows that urban unemployment decreases with urban development but increases with rural development. As for labour growth, it normally increases urban unemployment.

Suggested Citation

  • Nobuyuki Takeuchi, 2015. "Reconsidering the effect of economic development on urban unemployment under nonhomothetic preferences," Economics Bulletin, AccessEcon, vol. 35(1), pages 313-321.
    • Handle: RePEc:ebl:ecbull:eb-14-00594
    as

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    References listed on IDEAS

    as
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    6. Shigemi Yabuuchi, 1998. "Urban Unemployment, Factor Accumulation, and Welfare," Review of Development Economics, Wiley Blackwell, vol. 2(1), pages 31-40, February.
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    More about this item

    Keywords

    Harris-Todaro model; economic development; nonhomothetic preferences; urban unemployment; sector-specific capital;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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