Harris-Todaro models with a land market
Brueckner, Jan K. and Zenou, Yves (1999) Harris-Todaro models with a land market. Regional Science and Urban Economics, 29, (3), 317-339. (doi:10.1016/S0166-0462(98)00040-4).
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Description/Abstract
This paper adds a land market to a standard Harris-Todaro framework. In the standard model, the equilibrating force that limits rural-urban migration is a decline in the probability of formal employment, which follows from enlargement of the informal sector. The key insight of the present paper, borrowed from Brueckner (1990) [Brueckner, J.K., 1990. Analyzing Third World urbanization: A model with empirical evidence. Economic Development and Cultural Change 38, 587–610], is that urban land-rent escalation provides an additional force that limits the extent of migration. The most striking implication of this modified model is that formal-sector growth may not lead to additional migration from rural areas. The reason is that, because of land-rent escalation, such growth may depress a migrant's expected utility despite the improved chance of obtaining a formal job. In the second part of the analysis, the efficiency-wage model is used to make wages and employment in the formal sector endogenous instead of fixed. While many comparative-static effects are ambiguous in this more-complex model, the role of the land market is basically unaffected.
| Item Type: | Article |
|---|---|
| ISSNs: | 0166-0462 (print) |
| Related URLs: | |
| Keywords: | harris-todaro, rural-urban migration, third world cities |
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory |
| Divisions: | University Structure - Pre August 2011 > School of Social Sciences > Economics |
| Item ID: | 33076 |
| Date Deposited: | 26 Jul 2006 |
| Last Modified: | 12 Jul 2012 07:04 |
| Contributors: | Brueckner, Jan K. (Author) Zenou, Yves (Author) |
| Date: | 1999 |
| Status: | Published |
| URI: | http://eprints.soton.ac.uk/id/eprint/33076 |
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