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Migration and pollution

Jha, Raghbendra; Whalley, John

Description

We explore the links between migration of labour and location specific (urban) pollution, suggesting a sense in which pollution can be welfare improving. In a conventional Harris-Todaro model of urban-rural migration, individuals migrate so as to equate the expected urban wage (given a downward rigid real wage in the urban sector) to the real wage. Unemployment is endogenously determined. Interpreting unemployment as damage, urban pollution (damage denoted in units of labour) can also support...[Show more]

dc.contributor.authorJha, Raghbendra
dc.contributor.authorWhalley, John
dc.date.accessioned2003-08-06
dc.date.accessioned2004-05-19T18:18:05Z
dc.date.accessioned2011-01-05T08:35:35Z
dc.date.available2004-05-19T18:18:05Z
dc.date.available2011-01-05T08:35:35Z
dc.date.created2003
dc.identifier.urihttp://hdl.handle.net/1885/41787
dc.identifier.urihttp://digitalcollections.anu.edu.au/handle/1885/41787
dc.description.abstractWe explore the links between migration of labour and location specific (urban) pollution, suggesting a sense in which pollution can be welfare improving. In a conventional Harris-Todaro model of urban-rural migration, individuals migrate so as to equate the expected urban wage (given a downward rigid real wage in the urban sector) to the real wage. Unemployment is endogenously determined. Interpreting unemployment as damage, urban pollution (damage denoted in units of labour) can also support the same equilibrium with the value of damage equal to the value of resources otherwise lost through unemployment. However, if the damage function implies an uninternalized externality (due to urban congestion, for instance), an internalization gain can be realized through the use of a Pigouvian tax (or instrument) that discourages migration. Thus if pollution is introduced into a Harris-Todaro model with no such features, environmental damage displaces unemployment to support a similar outcome. Internalizing the externality then yields a welfare gain. We characterize the optimal Pigouvian tax in such a case and show that it is, in general, non-zero. In this sense, then, pollution can be welfare improving perhaps suggesting an alternative view of congestion and other adverse environmental effects facing urban dwellers in the developing world.
dc.format.extent41742 bytes
dc.format.extent360 bytes
dc.format.mimetypeapplication/pdf
dc.format.mimetypeapplication/octet-stream
dc.language.isoen_AU
dc.subjectMigration
dc.subjectdamage
dc.subjectpollution
dc.subjectunemployment
dc.titleMigration and pollution
dc.typeWorking/Technical Paper
local.description.refereedno
local.identifier.citationmonthjan
local.identifier.citationyear2003
local.identifier.eprintid1822
local.rights.ispublishedno
dc.date.issued2003
local.contributor.affiliationEconomics, RSPAS
local.contributor.affiliationANU
local.citationWorking papers in Trade and Development no.2003/07
CollectionsANU Research Publications

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