In many developing countries, agriculture hires at least as many workers as manufacturing industries. We investigate an economic geography model in which agricultural goods are costly to transport and in which manufactures hire labor from the local agricultural sector as unskilled labor. Our conclusions show that the parameters in the agricultural sector are crucial to determine the spatial configuration of economic activity. We provide an analytic treatment to the model. The location equilibria are compared with the first and second best outcomes.
|Number of pages||32|
|Journal||Journal of Development Economics|
|Publication status||Published - 2005 Jun|
- Agricultural sector
- Labor market
ASJC Scopus subject areas
- Economics and Econometrics