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,...

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure...