@TechReport{iza:izadps:dp9972,
            	author={Basu, Arnab K. and Chau, Nancy H. and Fields, Gary S. and Kanbur, Ravi},
            	title={Job Creation in a Multi-Sector Labor Market Model for Developing Economies},
            	year={2016},
	month={May},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={9972},
            	url={https://www.iza.org/index.php/publications/dp9972},
	abstract={This paper proposes an overlapping generations multi-sector model of the labor market for developing countries with three heterogeneities – heterogeneity within self-employment, heterogeneity in ability, and heterogeneity in age. We revisit an iconic paradox in a class of multi-sector labor market models in which the creation of high-wage employment exacerbates unemployment. Our richer setting allows for generational differences in the motivations for job search to be reflected in two distinct inverted U-shaped relationships between unemployment and high-wage employment, one for youth and a different one for adults. In turn, the relationship between overall unemployment and high-wage employment is shown to be non-monotonic and mult-peaked.
The model also sheds light on the implications of increasing high-wage employment on self-employed workers, who make up most of the world's poor. Non-monotonicity in unemployment notwithstanding, increasing high-wage employment has an unambiguous positive impact on high-paying self-employment, and an unambiguous negative impact on free-entry (low-wage) self-employment.},
	keywords={poverty reduction;overlapping generations;multisector labor market;Harris‐Todaro model},
            }