Arbeitspapier
The Todaro paradox revisited
The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise rather than reduce urban unemployment. The aim of this paper is to reexamine this paradox in the context of efficiency wage and search-matching models. For that, we study a policy that consists in decreasing the urban unemployment benefit. In an efficiency wage model, we find that there is no Todaro paradox while this is not always true in a search-matching model since a decrease in the urban unemployment benefit can increase both urban employment and unemployment.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 1861
- Classification
-
Wirtschaft
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Labor Contracts
Unemployment: Models, Duration, Incidence, and Job Search
Economic Development: Human Resources; Human Development; Income Distribution; Migration
- Subject
-
efficiency wages
search-matching
rural-urban migration
policy
- Event
-
Geistige Schöpfung
- (who)
-
Zenou, Yves
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2005
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Zenou, Yves
- Institute for the Study of Labor (IZA)
Time of origin
- 2005
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