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Optimal Urban Employment Policies: Notes on Calvo and Quibria
Author(s) -
Chau Nancy H.,
Ali Khan M.
Publication year - 2001
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.00121
Subject(s) - subsidy , intuition , economics , revenue , tax revenue , urban policy , public economics , relevance (law) , microeconomics , labour economics , urban planning , market economy , political science , finance , ecology , biology , law , philosophy , epistemology
We show that Quibria's insightful observation on the efficacy of urban policy in a model with an urban trade union and an urban informal sector holds, but with a revenue‐neutral employment tax‐subsidy combination levied on the urban employer. We also draw the relevance of the generalized Harris–Todaro model in providing intuition for the validity of this surprising result.