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Minimum Wage And Income Distribution In The Harris-Todaro Model

Author

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  • Vassilis T. Rapanos

    (University of Athens)

Abstract

The purpose of this paper is to examine the effects of a change in the minimum wage on income distribution and employment in a developing economy. The basic framework of our analysis is the original Harris-Todaro model, in which the only factor that is intersectorally mobile is labor. We analyze the effects of a change in the minimum wage on income distribution, sectoral employment and unemployment, both in the framework of a small open economy, and with endogenous commodity-price changes. Our findings differ from the results of the existing literature and shed light on the complex interaction between the urban and the rural sector of a developing economy.

Suggested Citation

  • Vassilis T. Rapanos, 2005. "Minimum Wage And Income Distribution In The Harris-Todaro Model," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 1-14, June.
    • Handle: RePEc:jed:journl:v:30:y:2005:i:1:p:1-14
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    File URL: http://www.jed.or.kr/full-text/30-1/01_J693.PDF
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    References listed on IDEAS

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    3. Kul Bhatia, 2001. "Specific and mobile capital, migration and unemployment in a Harris-Todaro model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(2), pages 207-222.
    4. M. Hasan Imam & John Whalley, 1985. "Incidence Analysis of a Sector-Specific Minimum Wage in a Two-Sector Harris-Todaro Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(1), pages 207-224.
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    6. Jai–Young Choi & Eden S. H. Yu, 2002. "External Economies in the International Trade Theory: A Survey," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 708-728, November.
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    Cited by:

    1. Muhammad Asim & Hafiza Naila Saddique, 2020. "Migration And Unemployment In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 123-134, September.

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    More about this item

    Keywords

    Minimum Wage; Economies of Scale; Urban Unemployment;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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