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Rural-urban migration, the informal sector, urban unemployment, and development policies: A theoretical analysis
Published in Blackwell Publishing Ltd
Volume: 4
Issue: 3
Pages: 353 - 364
This paper develops a theoretical model like Gupta's to show the simultaneous existence of the urban informal sector and open unemployment in the urban sector in a Harris-Todaro type of model of rural-urban migration. A wage or a price subsidy policy to the rural sector, or a demand management policy like an export promotional scheme in the manufacturing sector, reduces the urban unemployment level, and provides a theoretical basis for the introduction of export promotional measures like the formation of duty-free Export Processing Zones (EPZs) to solve the urban unemployment problem. The policy conclusions of the present paper are different from those found in Gupta's 1993 model.
About the journal
JournalReview of Development Economics
PublisherBlackwell Publishing Ltd