Labor Markets and Sustainability: Short-Run Dynamics and Long-Run Equilibrium

Many of the world’s economies experienced rapid structural changes due to globalization and other forces over past 50 years. During this period, developing countries were recipients massive foreign direct investment, their industrialization was accompanied by urbanization, city gigantism, related environmental issues, such as pollution. Over time, investments in education urban poor allowed move from industrial sector service sector. This growth came at expense sector, which implied cities cleaning efforts. The objective study is model these transitions a simple dynamic framework. economic indicates that short run, negatively impacted degradation agglomeration costs, while costs. In long optimal sizes are both decreasing functions Thus, sustainability ultimately determines size.