MIGRATION, MEDICAL AID AND WELFARE *

Wataru Kureishi and Ken Tabata

Australian Economic Papers, 2007, vol. 46, issue 4, pages 329-347

Abstract: This paper constructs a simple rural-urban migration model that explicitly incorporates the interactions between the individual's migration decision, the risk of incurring an infectious disease and unemployment. We show that providing a subsidy for health investment in urban regions in the form of medical aid does not improve individual welfare. This is because it induces further urban migration, increases the risk of infection and unemployment, and offsets completely the positive cost-reduction effect. Copyright 2007 The Authors
Journal compilation 2007 Blackwell Publishing Ltd/ University of Adelaide and Flinders University .

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