This paper explains the impact of output subsidy to the informal sector on urban unemployment and domestic factor income in a mobile capital model where urban formal wage is endogenous and the informal sector has global exposure.

Agriculture plays important role in the export sector in many developing countries. Governments in developing countries have been providing export subsidy to their farmers to boost up their export performance. However, The WTO announced the removal of export subsidy for both the developed as...

We consider a small open Harris-Todaro (1970) econmy with special emphasis on informal sector and open urban unemployment.The simultaneous existence of informal sector and urban unemployment is explained in terms of efficiency-wage relation. We examine the efficacy of subsidy policy to the urban...