INTERNAL MIGRATION RESTRICTIONS AND LABOR ALLOCATION IN DEVELOPING COUNTRIES

Peter Rangazas and Xiaobing Wang ()
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Xiaobing Wang: Economics Department, University of Manchester, Oxford Rd, Manchester M13 9PL, UK

The Singapore Economic Review (SER), 2019, vol. 64, issue 02, 263-279

Abstract: We develop a simple model with endogenous rural–urban migration to analyze the implications of migration restrictions for economic welfare. The model reveals that a combination of an efficient urban bias in public service provision and internal migration restrictions can raise social welfare. Our results suggest that migration restrictions should be carefully assessed as a policy choice rather than immediately dismissed as suboptimal. However, even when restrictions raise social welfare, they increase urban households’ welfare at the expense of rural households’ welfare, creating an equity tradeoff for policy-makers to consider.

Keywords: Urban bias; migration restrictions; fiscal policy; efficiency; China (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0217590817470051

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