Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

IMPACT FACTOR 2017: 0.220
5-year IMPACT FACTOR: 0.328

CiteScore 2017: 0.28

SCImago Journal Rank (SJR) 2017: 0.181
Source Normalized Impact per Paper (SNIP) 2017: 0.459

Mathematical Citation Quotient (MCQ) 2017: 0.09

See all formats and pricing
More options …

Welfare Analysis in an Extended Harris-Todaro Model: An Application of the Atkinson Theorem

Hautahi Kingi
Published Online: 2016-06-23 | DOI: https://doi.org/10.1515/bejte-2015-0132


I analyze the welfare effects of a policy of modern sector enlargement (MSENL), and a policy of increasing the efficiency of on-the-job search from the urban informal sector (IEOS) in a generalized Harris-Todaro model. I show that MSENL causes a Lorenz worsening of the income distribution and IEOS causes a Lorenz improvement. In a rare direct application of the Atkinson theorem, I conclude that MSENL decreases social welfare and IEOS increases social welfare for all anonymous, increasing and Schur-concave social welfare functions.

Keywords: Lorenz curves; segmented labor markets; inequality; welfare

JEL Classification: D3; D6; J6; O2


  • Atkinson, A. 1970. “On the Measurement of Inequality.” Journal of Economic Theory 2:244–63.CrossrefGoogle Scholar

  • Dalton, H. 1920. “The Measurement of the Inequality of Incomes.” Economic Journal 30:348–61.CrossrefGoogle Scholar

  • Dasgupta, P., A. Sen, and D. Starrett. 1973. “Notes on the Measurement of Inequality.” Journal of Economic Theory 6:180–7.CrossrefGoogle Scholar

  • Dutta, B. 2002. “Inequality, Poverty and Welfare.” In Handbook of Social Choice and Welfare, Volume 1, edited by K. Arrow, A. Sen, and K. Suzumura, 597–633. North Holland, Amsterdam: Elsevier, chapter 12, 1 edition.

  • Fields, G. 1989. “On-the-Job Search in a Labor Market Model: Ex Ante Choices and Ex Post Outcomes.” Journal of Development Economics 30:159–78.CrossrefGoogle Scholar

  • Fields, G. 2005. “A Welfare Economic Analysis of Labor Market Policies in the Harris-Todaro Model.” Journal of Development Economics 76:127–46.CrossrefGoogle Scholar

  • Harris, J., and M. Todaro. 1970. “Migration, Unemployment & Development: A Two-Sector Analysis.” American Economic Review 60:126–42.Google Scholar

  • Pigou, A. 1912. “Wealth and Welfare.” London: MacMillan.

  • Temple, J. 2005. “Growth and Wage Inequality in a Dual Economy.” Bulletin of Economic Research 57:145–69.CrossrefGoogle Scholar

  • World Bank. 2012. World Development Report 2013: Jobs. Washington, DC: World Bank.Google Scholar

About the article

Published Online: 2016-06-23

Published in Print: 2017-01-01

Citation Information: The B.E. Journal of Theoretical Economics, Volume 17, Issue 1, 20150132, ISSN (Online) 1935-1704, ISSN (Print) 2194-6124, DOI: https://doi.org/10.1515/bejte-2015-0132.

Export Citation

©2017 by De Gruyter.Get Permission

Comments (0)

Please log in or register to comment.
Log in