A note on the shadow wage in LCDs with migration and formal and informal urban sectors

Oded Stark*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Given induced rural-to-urban migration, the social cost of (unskilled) labour for urban public sector projects is shown to be lower than the formal-sector, exogenously-determined wage. This result is valid not only when the urban alternative to formal employment is unemployment but also (and more realistically) when the relevant alternatives are formal employment, informal employment and unemployment.

Original languageEnglish
Pages (from-to)235-240
Number of pages6
JournalEconomics Letters
Volume5
Issue number3
DOIs
StatePublished - 1980
Externally publishedYes

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