Rural-to-Urban Migration, Human Capital, and Agglomeration

Oded Stark and C. Simon Fan

No 7116, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

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.

Keywords: Community/Rural/Urban Development; Labor and Human Capital (search for similar items in EconPapers)
Pages: 25
Date: 2007
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Rural-to-urban migration, human capital, and agglomeration (2008)
Working Paper: Rural-to-urban migration, human capital, and agglomeration (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:7116

DOI: 10.22004/ag.econ.7116

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