During the last 50 years with unprecedented population growth and urbanization, economic development, particularly in developing countries failed to generate adequate employment and income opportunities in the modern sector, compelling the surplus labour force to generate its own means of...

The present paper develops a three sector Harris-Todaro (1970) type general equilibrium model of unemployment by incorporating endogenous skill formation. Two types of labour are considered: skilled labour and un-skilled labour. We examine the effects of the inflows of foreign capital on the...