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

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Keywords

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

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