The Todaro Paradox revisited
By: by Yves Zenou.
Series: Discussion paper ;; no. 1861; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1861
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Unemployment -- Government policy.
Description: "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"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 12/7/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.