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Nobuyuki Takeuchi
''Reconsidering the effect of economic development on urban unemployment under nonhomothetic preferences''
( 2015, Vol. 35 No.1 )
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.
Keywords: Harris-Todaro model, economic development, nonhomothetic preferences, urban unemployment, sector-specific capital
JEL: O1 - Economic Development: General
J6 - Mobility, Unemployment, and Vacancies: General
Manuscript Received : Jul 05 2014 Manuscript Accepted : Mar 11 2015

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