Demand fluctuation, urban workers and welfare: An extension of the Harris and Todaro model

Research output: Contribution to journalArticle

Abstract

The present paper is an attempt to construct an extended Harris-Todaro Modelan equilibrium model that incorporates a stochastic fluctuation. Based on this stochastic dynamic Harris-Todaro Model, we examined how an increase in the demand fluctuation and the ratio of less productive producers effects migration and welfare. The results revealed that an increase in uncertainty of demand and a decrease in the ratio of less productive producers enhance both the growth rate and variance of the urban employees as well as welfare.

Original languageEnglish
Pages (from-to)205-213
Number of pages9
JournalStudies in Regional Science
Volume38
Issue number1
DOIs
Publication statusPublished - 2008 Dec 1

    Fingerprint

Keywords

  • Dynamic programming
  • Harris and Todaro model
  • Stochastic economy
  • Urban workers
  • Welfare

ASJC Scopus subject areas

  • Environmental Science(all)
  • Social Sciences(all)

Cite this