This paper explores sufficient conditions for the welfare-improving environmental policy reform in the Harris-Todaro economy. A rise in the pollution tax rate in the urban manufacturing has on the two labor market distortions: The manufacturing employment and the urban unemployment. If both are...

This paper provides a theoretical and quantitative analysis of various types of wellknown employment subsidies. Two important questions are addressed: (i) How should employment subsidies be targeted? (ii) How large should the subsidies be? We consider measures involving targeting workers with...

We study how the interaction between economic openness and competitive selection affects the effectiveness of employment (and entry) subsidisation. Within a twocountry heterogeneous-firms model with endogenous labour supply, we find that optimal employment subsidies are always positive even...