Rural-to-urban migration, human capital, and agglomeration

Authors

Chengze, Simon FAN, Lingnan University, Hong Kong
Oded STARK, University of Klagenfurt, Austria, University of Bonn, Germany, University of Vienna, Austria, Warsaw University, Poland, and Warsaw School of Economics, Poland

Document Type

Journal article

Source Publication

Journal of Economic Behavior & Organization

Publication Date

10-1-2008

Volume

68

Issue

1

First Page

234

Last Page

247

Keywords

Agglomeration economies, Public policies, Rural-to-urban migration, The externality effect of the average level of human capital

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.

DOI

10.1016/j.jebo.2008.04.003

Print ISSN

01672681

Publisher Statement

Copyright © 2008 Elsevier B.V.

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Fan, C. S., & Stark, O. (2008). Rural-to-urban migration, human capital, and agglomeration. Journal of Economic Behavior & Organization, 68(1), 234-247. doi: 10.1016/j.jebo.2008.04.003