Rural-to-urban migration, human capital, and agglomeration

Chengze, Simon FAN, Oded STARK

Research output: Journal PublicationsJournal Article (refereed)

13 Citations (Scopus)

Abstract

A new general-equilibrium model that links together rural-to-urban migration, the externality effect of the average level of human capital, and agglomeration economies shows that in developing countries, unrestricted rural-to-urban migration reduces the average income of both rural and urban dwellers in equilibrium. Various measures aimed at curtailing rural-to-urban migration by unskilled workers can lead to a Pareto improvement for both the urban and rural dwellers. In addition, the government can raise social welfare by reducing the migration of skilled workers to the city. Moreover, without a restriction on rural-to-urban migration, a government''s efforts to increase educational expenditure and thereby the number of skilled workers may not increase wage rates in the rural or urban areas.
Original languageEnglish
Pages (from-to)234-247
Number of pages14
JournalJournal of Economic Behavior and Organization
Volume68
Issue number1
DOIs
Publication statusPublished - 1 Oct 2008

Fingerprint

Human capital
Agglomeration
Skilled workers
Government
Expenditure
Pareto improvement
Urban areas
Agglomeration economies
Workers
Education
Income
Social welfare
Externalities
General equilibrium model
Wage rate
Developing countries
Rural areas

Keywords

  • Agglomeration economies
  • Public policies
  • Rural-to-urban migration
  • The externality effect of the average level of human capital

Cite this

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abstract = "A new general-equilibrium model that links together rural-to-urban migration, the externality effect of the average level of human capital, and agglomeration economies shows that in developing countries, unrestricted rural-to-urban migration reduces the average income of both rural and urban dwellers in equilibrium. Various measures aimed at curtailing rural-to-urban migration by unskilled workers can lead to a Pareto improvement for both the urban and rural dwellers. In addition, the government can raise social welfare by reducing the migration of skilled workers to the city. Moreover, without a restriction on rural-to-urban migration, a government''s efforts to increase educational expenditure and thereby the number of skilled workers may not increase wage rates in the rural or urban areas.",
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Rural-to-urban migration, human capital, and agglomeration. / FAN, Chengze, Simon; STARK, Oded.

In: Journal of Economic Behavior and Organization, Vol. 68, No. 1, 01.10.2008, p. 234-247.

Research output: Journal PublicationsJournal Article (refereed)

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KW - Agglomeration economies

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