Security, the environment, and regional migration of labor: a theoretical analysis in a dual economy

Local amenities, such as security and the environment, affect utility. Regional differences in utility drive labor migration. Therefore, this study uses a framework wherein local security and environmental conditions influence utility, while differences in utility between rural and urban areas motivate regional migration. A key feature of this study is the introduction of security into the analysis. Using comparative static analysis within a general equilibrium model, the effects of an increase in police presence and a decrease in the rate of pollution generation are theoretically investigated. An increase in police presence aimed at improving security creates a trade-off of decreasing private-sector labor. This reduction in private-sector labor alters the economic structure through regional migration. The study shows that increasing police presence improves security but deteriorates the environment. Changes in the unemployment ratio and workers’ aggregate welfare depend on the relative strength of these effects. If the positive effect of improved security outweighs the negative effect of environmental deterioration, workers’ aggregate welfare increases even though the unemployment ratio also rises. In contrast, a decrease in the rate of pollution generation improves the environment but worsens security. Moreover, both the unemployment ratio and workers’ aggregate welfare necessarily increase.