Bharati Basu

Rural-urban migration, urban unemployment and the structural transformation of a dual economy

This paper restructures the Harris–Todaro model in such a way that rural–urban migration in the presence of urban unemployment brings in the structural transformation desired for a developing dual economy by expanding the industrial sector before any policy is introduced to cure the domestic factor market distortion. Furthermore, migration may also help to eliminate unemployment as well as the wage gap in the economy. When international trade is introduced in this restructured dual economy, trade policies would have new implications; for example, unlike in the original Harris– Todaro structure, the import tariff may bring full employment and eliminate wage gaps between the sectors.

Domestic violence against women, and their economic dependence: A count data analysis

In examining the relation between violence against women and womens economic dependence, existing literature treats the incidents of violence either as a binary or as a continuous variable. However, the incidents of violence is a count variable and, quite often, data on the number of violent incidents is categorized. This paper estimates the relation between violence against women and economic dependence by using a categorized negative binomial regression model. The model is suitable for categorized count data and thus provides a more accurate estimation of the relation than what is provided in the literature. Data analyses in this paper show that less economic dependence of women is associated with less violence.

Foreign Direct Investment and Skill Formation in China

Using panel data analyses, this paper examines the relation between human capital formation and Foreign Direct Investment (FDI) in China. It shows that FDI has a significant effect on human capital formation, at least for the period 1995–2001. When we estimate the relationship between FDI and skill formation for the coastal and non-coastal provinces separately, the positive relationship is maintained, and this relationship also holds when we consider investment in real estate or the ratio of number of foreign firms to total number of firms investing in China. The results stand robust in the causality test and the sensitivity analysis.

Minimum Wage, International Migration And Their Effects On Welfare

This paper evaluates migration policies for an open economy in the presence of unemployment resulting from a minimum wage. Migration between countries is triggered by an expected wage differential which depends both on the market wage and the level of unemployment. Workers therefore can move in either direction. The paper shows that labor outflow raises employment and welfare. Distortion-ridden free trade with this out-migration is therefore better than distortion-ridden free trade with no migration. It might also be better than autarky. Under the scenario, free migration is an alternative to restricted trade often recommended to deal with this type of distortion. Labor inflow on the other hand generates unfavorable terms of trade, raises national and global unemployment, and reduces welfare. [F 2]

Marriage, fertility and the selection of women into high-skill industries

This article focuses on the selection of women into industries of different skill intensities as another dimension in the discussion of the differences in wages among similarly skilled women. Using the Current Population Survey (CPS) data and controlling for education and other factors, we find evidence that married women tend to work in industries that are less skill intensive and that pay lower wages. We also find that education and experience affect this selection process less favourably for married women compared with single women. Since less skill-intensive industries often pay lower wages for similar occupations, our results contribute to the broader debate over the gaps in wages between single and married women as well as men and women.

Regional inequality and immiserization

In this paper we use a four‐sector, two‐region model to investigate the impact of an increase in capital on regional income inequality. We also analyze its impact on wages, and rents on capital and land. These changes occur due to a movement in the internal terms of trade – a worsening of the relative price of rural non‐traded goods to urban non‐traded goods – as distinct from the international terms of trade. We demonstrate that under certain conditions, an increase in urban capital necessarily immiserizes the rural region and thereby increases inequality among regions.

International Migration and Welfare in the Presence of Non-Traded Goods: An Interconnected Markets Approach

This paper shows that if the terms of trade are determined endogenously for an open economy with a non-traded good sector, emigration results in favorable changes in the terms of trade for the remaining residents of the country (non-migrants). These changes and the gift of non-removable capital resources to non-migrants may offset the welfare loss which results from the loss of trading opportunity the non-migrants had with the migrants before migration occurred. Thus, the non-migrants may gain in welfare as a result of migration.[F22]