The Todaro Paradox: An Econometric Test Using Data from Congo
Author(s)
Samuel Ambapour
ABSTRACT
In this paper we test on data from Congo, what is come to know as Todaro Paradox. That is, on the one hand, the idea is put forward by Lewis that, industrial expansion will allow developing countries to reduce unemployment caused by an oversized rural workforce. However, on the other hand, Harris and Todaro argue that expanding urban employment will attract the rural population into the cities thus increasing unemployment. Our result seems to confirm Lewis’ theory that urban job creation leads to lower unemployment.
In this paper we test on data from Congo, what is come to know as Todaro Paradox. That is, on the one hand, the idea is put forward by Lewis that, industrial expansion will allow developing countries to reduce unemployment caused by an oversized rural workforce. However, on the other hand, Harris and Todaro argue that expanding urban employment will attract the rural population into the cities thus increasing unemployment. Our result seems to confirm Lewis’ theory that urban job creation leads to lower unemployment.
KEYWORDS
Urban Unemployment, Technological Dualism, Migratory Flow, General Equilibrium Model, Returns to Scale
Urban Unemployment, Technological Dualism, Migratory Flow, General Equilibrium Model, Returns to Scale
Cite this paper
Ambapour, S. (2015) The Todaro Paradox: An Econometric Test Using Data from Congo. Modern Economy, 6, 881-887. doi: 10.4236/me.2015.68083.
Ambapour, S. (2015) The Todaro Paradox: An Econometric Test Using Data from Congo. Modern Economy, 6, 881-887. doi: 10.4236/me.2015.68083.
References
[1] Lewis, W.A. (1954) Economic Development with Unlimited Supplies of Labour. The Manchester School of Economic and Social, 22, 139-191. [2] Problèmes Economiques (1999) 1969-1999: L’économie à travers les prix Nobel. Problèmes Economiques, No. 2.637. [3] Cahuc, P. and Celimène, F. (1993) L’expansion du secteur moderne diminue-t-elle le chomage dans les pays en développement? Economie & Prévision, 108, 31-46.
http://dx.doi.org/10.3406/ecop.1993.5606 [4] Sadoulet, E. (1983) Croissance inégalitaire dans une économie sous-développée. Librairie Droz. [5] Todaro, M. (1969) A Model of Labor Migration and Urban Unemployment in Less Developed Countries. American Economic Review, 59, 138-148. [6] Todaro, M. (1970) Labor Migration and Urban Unemploment: Reply. American Economic Review, 60, 187-188. [7] Todaro, M. (1976) Urban Job Expansion, Induce Migration and Rising Unemployment. A Formulation and Simplified Empirical Test for LDC’s. Journal of Development Economic, 3, 165-187. http://dx.doi.org/10.1016/0304-3878(76)90049-3 [8] Harris, R. and Todaro, M. (1970) Migration, Unemployment and Development: A Two Sector Analysis. American Economic Review, 60, 126-142. [9] Assidon, E. (1992) Les Théories Economiques du Développement. Editions la Découverte. [10] Azam, J.P. (1995) Une Politique de Développement pour l’Afrique : Programme de recherche. Dans “Quel avenir pour l’économie africaine” OCDE. [11] Zarembaka, P. (1970) Labor Migration and Urban Unemployment: Comment. American Economic Review, 60, 184-186. [12] Blomqvist, A. (1978) Urban Job Creation and Unemployment in LDC’s: Todaro vs Harris & Todaro. Journal of Development Economics, 5, 3-18. http://dx.doi.org/10.1016/0304-3878(78)90039-1 [13] Arellano, J.P. (1981) Do More Jobs in the Modern Sector Increase Urban Unemployment? Journal of Development Economics, 8, 241-247. http://dx.doi.org/10.1016/0304-3878(81)90031-6 [14] Stark, O., Gupta, M. and Levhari, D. (1991) Equilibrium Urban Unemployment in Developing Countries: Is Migration the Culprit? Economics Letters, 37, 447-482. http://dx.doi.org/10.1016/0165-1765(91)90090-8 [15] Zajdela, H. (1990) Le dualisme du marché du travail, enjeux et fondements théoriques. Economie & Prévision, 92, 31-43. http://dx.doi.org/10.3406/ecop.1990.5155 [16] Calvo, G. (1978) Unemployment and Wage Determination in LDC’s: Trade Union in the Harris-Todaro Model. International Economic Review, 16, 65-81. http://dx.doi.org/10.2307/2526394 [17] Perrot, A. and Zylberberg, A. (1989) Salaire d’efficience et dualisme du marché du travail. Revue Economique, 40, 5-20. [18] Malinvaud, E. (1987) Voies de la recherche macroéconomique. Editions Odile Jacob, Paris. [19] Esfahani, H.S. and Salehi-Ifahani, D. (1989) Effort Observability and Worker Productivity: Towards and Explanation of Economic Dualism. Economic Journal, 99, 818-836. http://dx.doi.org/10.2307/2233773 [20] PNUD (2000) Projet PRC 2000/551, Brazzaville. [21] Morgenstern, O. (1950) L’illusion statistique, Précision et incertitude des données économiques. Traduction francaise, Dunod, 1972. [22] Erkel-Rousse, H. (1995) Introduction à l’économétrie du modèle linéaire. Cours polycopié, ENSAE, Malakoff. [23] Greene, W.H. (2000) Econometric Analysis. Prentice Hall, Upper Saddle River. [24] Brasseur, J. (1993) Les nouveaux pays industrialisés. Armand Colin, Paris. [25] PNUD (2002) Rapport National sur le développement humain 2002. République du Congo. Guerres, et après? Développement humain en situation de post conflit. [26] Banque de France (1994) La Zone Franc, Rapport Annuel.
[1] Lewis, W.A. (1954) Economic Development with Unlimited Supplies of Labour. The Manchester School of Economic and Social, 22, 139-191. [2] Problèmes Economiques (1999) 1969-1999: L’économie à travers les prix Nobel. Problèmes Economiques, No. 2.637. [3] Cahuc, P. and Celimène, F. (1993) L’expansion du secteur moderne diminue-t-elle le chomage dans les pays en développement? Economie & Prévision, 108, 31-46.
http://dx.doi.org/10.3406/ecop.1993.5606 [4] Sadoulet, E. (1983) Croissance inégalitaire dans une économie sous-développée. Librairie Droz. [5] Todaro, M. (1969) A Model of Labor Migration and Urban Unemployment in Less Developed Countries. American Economic Review, 59, 138-148. [6] Todaro, M. (1970) Labor Migration and Urban Unemploment: Reply. American Economic Review, 60, 187-188. [7] Todaro, M. (1976) Urban Job Expansion, Induce Migration and Rising Unemployment. A Formulation and Simplified Empirical Test for LDC’s. Journal of Development Economic, 3, 165-187. http://dx.doi.org/10.1016/0304-3878(76)90049-3 [8] Harris, R. and Todaro, M. (1970) Migration, Unemployment and Development: A Two Sector Analysis. American Economic Review, 60, 126-142. [9] Assidon, E. (1992) Les Théories Economiques du Développement. Editions la Découverte. [10] Azam, J.P. (1995) Une Politique de Développement pour l’Afrique : Programme de recherche. Dans “Quel avenir pour l’économie africaine” OCDE. [11] Zarembaka, P. (1970) Labor Migration and Urban Unemployment: Comment. American Economic Review, 60, 184-186. [12] Blomqvist, A. (1978) Urban Job Creation and Unemployment in LDC’s: Todaro vs Harris & Todaro. Journal of Development Economics, 5, 3-18. http://dx.doi.org/10.1016/0304-3878(78)90039-1 [13] Arellano, J.P. (1981) Do More Jobs in the Modern Sector Increase Urban Unemployment? Journal of Development Economics, 8, 241-247. http://dx.doi.org/10.1016/0304-3878(81)90031-6 [14] Stark, O., Gupta, M. and Levhari, D. (1991) Equilibrium Urban Unemployment in Developing Countries: Is Migration the Culprit? Economics Letters, 37, 447-482. http://dx.doi.org/10.1016/0165-1765(91)90090-8 [15] Zajdela, H. (1990) Le dualisme du marché du travail, enjeux et fondements théoriques. Economie & Prévision, 92, 31-43. http://dx.doi.org/10.3406/ecop.1990.5155 [16] Calvo, G. (1978) Unemployment and Wage Determination in LDC’s: Trade Union in the Harris-Todaro Model. International Economic Review, 16, 65-81. http://dx.doi.org/10.2307/2526394 [17] Perrot, A. and Zylberberg, A. (1989) Salaire d’efficience et dualisme du marché du travail. Revue Economique, 40, 5-20. [18] Malinvaud, E. (1987) Voies de la recherche macroéconomique. Editions Odile Jacob, Paris. [19] Esfahani, H.S. and Salehi-Ifahani, D. (1989) Effort Observability and Worker Productivity: Towards and Explanation of Economic Dualism. Economic Journal, 99, 818-836. http://dx.doi.org/10.2307/2233773 [20] PNUD (2000) Projet PRC 2000/551, Brazzaville. [21] Morgenstern, O. (1950) L’illusion statistique, Précision et incertitude des données économiques. Traduction francaise, Dunod, 1972. [22] Erkel-Rousse, H. (1995) Introduction à l’économétrie du modèle linéaire. Cours polycopié, ENSAE, Malakoff. [23] Greene, W.H. (2000) Econometric Analysis. Prentice Hall, Upper Saddle River. [24] Brasseur, J. (1993) Les nouveaux pays industrialisés. Armand Colin, Paris. [25] PNUD (2002) Rapport National sur le développement humain 2002. République du Congo. Guerres, et après? Développement humain en situation de post conflit. [26] Banque de France (1994) La Zone Franc, Rapport Annuel.