Liberalization and "Jobless Growth" in a Developing Economy: some Extended Results

This paper, in terms of a three-sector mobile capital version of Harris-Todaro type general equilibrium model of rural-urban migration with agricultural dualism and a non-traded intermediate input, tries to theoretically explain why a developing country may experience a ‘jobless growth’ during liberalised regime as suggested by empirical evidences. I have considered impacts of trade liberalization (captured by a tariff-reform in the protected importcompeting sector) and liberalization of labour laws (captured by a reduction in the bargaining strength of the labour unions). These findings are particularly interesting for their contradiction to the predictions of standard Harris-Todaro model.