EconPapers    
Economics at your fingertips  
 

Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations

Luc Christiaensen, Joachim De Weerdt and Ravi Kanbur

No 11994, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Should public investment be targeted to big cities or to small towns, if the objective is to minimize national poverty? To answer this policy question we extend the basic Todaro-type model of rural-urban migration to the case of migration from rural areas to two potential destinations, secondary town and big city. We first derive conditions under which a poverty gradient from rural to town to city will exist as an equilibrium phenomenon. We then address the policy question and show how the answer depends on the migration response, where the poverty line lies relative to incomes in the three locations, and at times also the poverty index itself. In particular, we develop sufficient statistics for the policy decisions based on these income parameters and illustrate the empirical remit of the model with long running panel data from Kagera, Tanzania. Further, we show that the structure of the sufficient statistics is maintained in the case where the model is generalized to introduce heterogeneous workers and jobs. Overall, the findings confirm that, given migration responses, national poverty outcomes are not immune to whether urban employment generation takes place in the towns or the city.

Keywords: Equilibrium Income Distribution.; Migration Equilibrium; Poverty Gradient; Poverty Reduction; Secondary Towns versus Big Cities; Todaro Model (search for similar items in EconPapers)
JEL-codes: I3 J61 O18 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mig and nep-ure
Date: 2017-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11994 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations (2017) Downloads
Working Paper: Cities, towns, and poverty: migration equilibrium and income distribution in a todaro-type model with mulitiple destinations (2017) Downloads
Working Paper: Cities, towns, and poverty: Migration equilibrium and income distribution in a Todaro-type model with multiple destinations (2017) Downloads
Working Paper: Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations (2017) Downloads
Working Paper: Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11994

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=11994

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-15
Handle: RePEc:cpr:ceprdp:11994