How does rural areas differ from urban area in term of unemployment
Answers
Answer:
A large number of studies have analyzed the incidence of carbon taxes in developed countries, and a subset of these studies have looked at how carbon tax policies affect unemployment. Nonetheless, general equilibrium studies of environmental taxation, based on unique institutional and economic characteristics of developing countries, are limited. Special features of developing economies, which include “dual” economies with modern and traditional sectors, or three‐sector economies with a traditional rural sector and an urban sector (characterized by both a formal and informal sector), suggest that models from studies of developed countries are not appropriate to examine the employment and wage impacts of green tax policies. The policy guidelines derived from existing studies in developed countries are likely to be misleading for developing countries, as they do not take into account economic conditions that are specific to developing countries.
This paper develops a dual economy model, which is an extension of Saatchi and Temple (2009) to analyze the effects of energy taxes in general equilibrium. The model features three sectors: urban formal, urban informal,1 and rural agricultural. The search and matching frictions following Pessaries (2000) form a distinction between formal, or “regulated,” jobs and informal, or “unregulated,” jobs. This entails that workers in the informal sector search for jobs in the formal sector, with the unemployment rate being defined as the proportion of the population that is self-employed in the informal sector. The income of the unemployed comprises unemployment benefits and income from self‐employment in the informal sector.
Answer:
In contrast, the primary occupation of rural people is agriculture and animal husbandry. Population wise , Urban areas are densely populated, which is based on the urbanisation, i.e. the higher the urbanisation , the higher is the population.
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