We consider a small open Harris-Todaro (1970) economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. The main objective of this paper is to analyse the effects...

The main objective of this paper is to analyse the effect of anti-subsidization policy in the rural sector on urban unemployment and national welfare. Two different versions have been considered: first, urban informal sector has no global exposure and the urban formal wage rate is exogenous;...

We consider a small open Harris-Todaro (1970) econmy with special emphasis on informal sector and open urban unemployment.The simultaneous existence of informal sector and urban unemployment is explained in terms of efficiency-wage relation. We examine the efficacy of subsidy policy to the urban...

The main purpose of the paper is to examine the effects of trade reform on the skill structure of the urban formal and the informal sectors. Two types of trade reforms are considered here: reduction in tariff and reduction in export subsidy. My analysis shows that a tariff reduction raises...