Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/140812
Authors: 
Stark, Oded
Fan, C. Simon
Year of Publication: 
2007
Series/Report no.: 
CMR Working Papers 28/86
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.
Subjects: 
Rural-to-urban migration
The externality effect of the average level of human capital
Agglomeration economies
Public policies
JEL: 
B12
H21
O15
O18
R13
R23
Document Type: 
Working Paper

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