Book contents
- Frontmatter
- Contents
- Preface
- 1 Introduction
- 2 Models of convergence
- 3 Behavior in the short run
- 4 Uncertainty
- 5 An application to state lottery games
- 6 An application to the problem of search behavior
- 7 Inflationary disequilibrium
- 8 Advertising and imitation
- 9 An application to migration
- 10 Conclusions
- References
- Index
9 - An application to migration
Published online by Cambridge University Press: 07 October 2011
- Frontmatter
- Contents
- Preface
- 1 Introduction
- 2 Models of convergence
- 3 Behavior in the short run
- 4 Uncertainty
- 5 An application to state lottery games
- 6 An application to the problem of search behavior
- 7 Inflationary disequilibrium
- 8 Advertising and imitation
- 9 An application to migration
- 10 Conclusions
- References
- Index
Summary
The comparative-statics theory of optimal labor-force location is straightforward. Workers are presumed to compare geographic employment locations with respect to wage rates, risks of unemployment, and quality of life, and markets are in equilibrium when workers in general see alternative employment locations as approximately equivalent once all these variables are taken into account. Thus, equilibrium wage rates (for given skill levels) might be lower in areas characterized by attractive climatic conditions or stimulating cultural environment and higher in areas with high unemployment or high levels of industrial pollution.
A particularly important application of this theory has arisen in the field of development economics. Attention in this case is confined to the relationship between wage rates and unemployment. In most studies (e.g., Harris and Todaro, 1970; Todaro, 1974; Stiglitz, 1974) it is presumed that rural workers in less developed countries are fully employed and that the urban labor supply is determined not by prevailing urban wage rates alone but by a composite of urban wages and the (typically high) urban unemployment rate. Individual workers are assumed to compare the income that they can earn from (guaranteed) employment in rural agriculture at a low wage to what could be received in the city, where the expected urban income is computed from the higher urban wage and various assumptions regarding the probability of finding employment there.
The question of greatest concern to economists working in this field is not the comparative-statics equilibrium distribution of the work force but the dynamic process of rural–urban migration as a continuing phenomenon.
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- Chapter
- Information
- A Theory of Adaptive Economic Behavior , pp. 166 - 178Publisher: Cambridge University PressPrint publication year: 1983