TITLE:
The Todaro Paradox: An Econometric Test Using Data from Congo
AUTHORS:
Samuel Ambapour
KEYWORDS:
Urban Unemployment, Technological Dualism, Migratory Flow, General Equilibrium Model, Returns to Scale
JOURNAL NAME:
Modern Economy,
Vol.6 No.8,
August
10,
2015
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.