Urbanization and rural urban migration and the harris todaro model lecture 9 chapter 7 2 facts positive association between urbanization and per capita income. Below are two distributions of income in these countries. Models of surplus labour economic models economics. Todaro model is that workers base their migration decision on.
Our point of departure is the received theory of ruralurban migration in less developed countries, which is the model of harris and todaro 1970. The difference between these sectors are the type of goods produced, the technology of. This, according to todaro, is due to that mobility and migration which is taking place from rural areas to urban areas. This paper extends the neoclassical, harristodaro model of urbanrural migration to the case of production uncertainty in the agricultural sector. To achieve the objective 500 migrant household heads were selected randomly from three kebeles of the town. The thesis studies the applicability of the harris todaro model to rural to urban migration processes in developing countries. A twosector analysis in 1970 presented a model on rural urban migration in underdeveloped countries. The migration of labor from rural to urban areas is an important part of the. On a fundamental level, expected income accounts for the wage differential between urban and rural areas. According to him, this theory may correspond to the historical scenario of migration in the western socioeconomic milieu but does not explain the trends of rural urban migration in less. A twosector analysis, they created a model where the migration decision is based on expected earnings. At the core of the harristodaro model were the following features.
May 01, 2018 harris todaro model full and detailed explanation with complete understanding. W e consider a model of rural urban migration with three sectors. Urban migration will occur if the percentage of those employed in the urban sector multiplied by the wage rate is greater than the rural sector wage rate equal to marginal productivity. The harristodaro model of the ruralurban migration process is revisited under an agentbased approach. The model the research model formulated for this paper has been loosely adopted from the basic harris todaro model where the migration ratio is determined in terms of differential in the expected urban wage and rural wage. Ruralurban migration and economic growth in developing countries. Contribution by the harris todaro ht 1970 model explains a powerful explanation of urban unemployment in less developed economies. Take two countries, a and b, each has 100 mil population and in both countries 50% population is poor. Todaro migration model and harristodaro equilibrium. Assumptions harris and todaro 1 studied the migration of workers in a twosector economic system, namely, rural sector and urban sector. In light of these events, john harris and michael todaro formulated the harristodaro model to explain the puzzle. Urban to rural migration will occur in the inverse scenario. Pdf the harristodaro migration model and introduction. As such, it did not specifically consider the welfare of the rural sector.
In the harristodaro model, the rising urban wage pushes up the expected wage in the urban sector and consequently encourages workers to migrate from the rural sector to the urban sector. The main assumption of the model is that the migration decision is based on expected income differentials between rural and urban. Todaro was professor of economics at new york university for eighteen years and senior associate at. A harristodaro agentbased model to ruralurban migration scielo. How ever, unlike the present model which attempts to view the migration process in context of aggregate and inter sectoral welfare considerations, todaro s model was strictly concerned with the formulation of a positive theory of urban unemployment in developing nations. Even though these papers were written for developing countries, the. Todaro migration model and harristodaro equilibrium ucsb. They hypothesize that individuals migrate to urban sectors with the aim of obtaining employment in the formal sector and that informal sector employment is a transitional phase during which migrants are searching for formal sector job.
Michael paul todaro born may 14, 1942 is an american economist and a pioneer in the field of development economics todaro earned a phd in economics from yale university in 1968 for a thesis titled the urban employment problem in less developed countries an analysis of demand and supply. Principally, the essence of both models link back to the development of urban areas, and the migration process, however, the assumptions of each model. Todaro 1969 and harris and todaro 1970 set up a seminal framework of migration between rural and urban areas. Ppt the todaro model powerpoint presentation free to.
For that purpose, we will run simulations for both cases in ms excel, and try to analyze outcomes and suggest possible policies. The harristodaro model of ruraltourban labor migration. Harris and michael todaro published their migration model in 1970 known as the harris todaro model to overcome the shortcomings in the previous models. At the core of the harris todaro model were the following features. The focus lies not only with the basic model, but also with those extensions modelling international trade, an urban informal sector and agglomeration economics. The condition itself is simple, but it offers signi. Despite the existence of positive marginal products in agriculture and significant levels of urban unemployment, rural urban labor migration not only continues to exist, but indeed, appears to be accelerating. The authors propose that rural urban migration continues to. Pdf the harristodaro model of the ruralurban migration process is revisited under an agentbased approach. The difference between these sectors are the type of goods produced, the technology of production and the process of wage determination. Thus, the todaro model of ruralurban migration states. Bell 1991 points out that in the presence of spatially nonmobile regional factors.
The main assumption of the model is that the migration decision is based on. Brueckner and zenou 1999 hereafter bz argue that a model where migration equalizes expected wages between city and countryside may overlook another important force that equilibrates the process of rural. A condition for the reduction of urban unemployment in the. Jun 20, 2015 i always felt that the ht model was an important contribution to the literature, but the dearth of youtube content left me to wonder about this assumption. Urban migration for young chinese on the rise duration. Our economy has eight million workers, and consists of two sectors, rural and urban, with. Throughout mnany less developed economies of the world, especially those of tropical africa, a curious economic phenomenon is presently taking place.
The main idea of the harris todaro model is that labour migration in underdeveloped countries is due to rural urban differences in average expected. Keywords harris todaro model domestic migration domestic wage gap informal sector urban unemployment jel classi. A modified harristodaro model of ruralurban migration for. The main idea of the harristodaro model is that labour migration in underdeveloped countries is due to ruralurban differences in average expected.
The migration of the workers is interpreted as a process of social learning by imitation. As such, this study aims at establishing the major causes and consequences of the movement of people from rural to urban areas. Directorate of census operations, government of india. However, focusing solely on the ruralurban wage di. In two seminal papers, todaro 1969 and harris and todaro 1970 have developed a canonical model of rural urban migration. The ht model motivated the wage differential between rural and urban sectors somewhat differently from the lewis model. Let us suppose the economy is divided into two sectors. Todaro ht tradition has added an important new element to the model by incorporating an urban land market. A modified harristodaro model of ruralurban migration for china. China center for economic research peking university.
Ruralurban migration is greater than the urban areas abilities to create jobs and provide social services but hans rosling says, it is less expensive to provide health and education and postal services in urban areas than in dispersed rural areas example. A harristodaro agentbased model to ruralurban migration. Jun 10, 20 urban migration will occur if the percentage of those employed in the urban sector multiplied by the wage rate is greater than the rural sector wage rate equal to marginal productivity. Part 2 of harristodaro ruraltourban labor migration. The harris todaro model focuses upon incomes between rural and urban areas and how they vary, it states that income levels are seen as higher in urban areas which influence migration to the area. Part 2 of harris todaro rural to urban labor migration model graphical link to part 1 below. Harristodaro model of urban unemployment, discuss two cases.
They stressed upon saving, investment, growth rate and productive efficiency. Under the harris todaro model, the decision to migrate is made upon differences in expected income between rural and urban areas. The unlimited supplies of labor models as presented by lewis and ranisfei failed to pay attention over migration. The model assumes that there exist an institutionally fixed minimum wage in the urban sector, that there is urban unemployment in equilibrium and that rural to urban. In light of these events, john harris and michael todaro formulated the harris todaro model to explain the puzzle.
The following is an analysis of the harris todaro model that i prepared for a developmental economics class at uwmadison. First, real wages adjusted for costofliving differences are higher in urban formalsector jobs than in rural. This is the core innovation of the harris todaro model. Ppt the harristodaro model powerpoint presentation free. Despite mass unemployment in cities people are migrating from villages to towns and cities. In developing countries like ethiopia rural urban migration affects development in both urban and rural areas. A harris todaro agentbased model to rural urban migration. Migration occurs until the rural wage equals the expected urban wage expected due to employment. Urban overcrowding due to high rates of migration from rural areas to cities and high informal sector employment is a fact of life in many low and middle income countries. Laissezfaire migration is too low compared with the first best outcome.
Harris and todaro 1 studied the migration of workers in a twosector economic system, namely, rural sector and urban sector. Todaro accepts the logistics of lewisfeiranis model of rural urban migration but only with reservations. Dual economy, surplus labor, disguised unemployment, informal sector, rural and urban sectors. First, lets define real per capita income in the rural sector. What is the main difference in prediction between the lewis model and the harris todaro model on rural to urban migration. Rural urban migration a verbal description of the todaro modela verbal description of the todaro model migration is a rational decision the decision depppends on expected rather than actual wage differentials the probability of obtaining a city job is inversely related to the urban unemployment raterelated to the urban unemployment rate. Todaro accepts the logistics of lewisfeiranis model of ruralurban migration but only with reservations. The harris todaro model of labor migration in the literature of development economics 2 2. A twosector analysis in 1970 presented a model on ruralurban migration in underdeveloped countries. Harris todaro model of urban unemployment, discuss two cases. The harris todaro ht model takes most of lewis models assumptions as given, such as the rural sector being characterized by subsistence agriculture, and the urban sector being characterized by modernized industries. Citeseerx document details isaac councill, lee giles, pradeep teregowda. The migration of the workers is interpreted as a process of social learning by imitation, formalized by a computational model. The harristodaro model of labor migration and its commercial.
The motivation for the harristodaro hypothesis lies in an attempt to explain the persistence of rural to urban migration in the presence of widespread urban unemployment, a pervasive phenomenon in many, socalled less developed, countries but also see suits 1985 and partridgerickman 1987. This is a graphical exposition of the model in todaro s economic development text 5th edition, 1994. Dec 21, 2017 contribution by the harris todaro ht 1970 model explains a powerful explanation of urban unemployment in less developed economies. Population and economic change in developing countries. Harris and michael todaro, is an economic model developed in 1970 and used in development economics and welfare economics to explain some of the issues concerning ruralurban migration. In two seminal papers, todaro 1969 and harris and todaro 1970 have developed a canonical model of ruralurban migration. Todaro in an article migration, unemployment and development.
Lewis model suggests the problem is too little rural urban migration, so policymakers should focus on increasing migration ows but many urban migrants do not get good jobs and remain in unproductive informal sector, besides raising social tensions and straining urban. Due to the enforcement of household registration hokou, illegal migrants from the rural area may search for and take a job in the city, though they suffer a wage. Suppose there are n number of employable persons in the economy of which n r are employed in the rural sector and n u are employed in the urban. The harris todaro model of rural to urban labor migration. The harris todaro model high rates of migration result from better opportunities in urban areas migration is a rational decision wage in formal sector is too high excess supply so unemployment exists in urban formal sector. Ruraltourban migration in developing countries the. First, real wages adjusted for cost of living differences are higher in urban formalsector jobs than in rural traditionalsector jobs. Brueckner and zenou 1999 hereafter bz argue that a model where migration equalizes expected wages between city and countryside may overlook another important force that equilibrates the process of. Journal of economic and social development viii 2012.
Apr 14, 2016 ruraltourban migration in developing countries. The harris todaro model analyzes workers migration decisions based on a comparison of the costofliving in the urban versus rural areas. The existence of a higher wage in urban areas compared to rural areas is a relatively constant observation. Commercial policies for a harris todaro economy 14 references 19 trade policies and welfare in a harris todaro economy 23 1. A unique feature of the harristodaro model is an exogenously determined minimum wage in the urban sector that exceeds the rural wage. Towards an economic theory of rural urban migration the harris todaro model motivation. Our economy has eight million workers, and consists of two sectors, rural and urban, with demand curves for labor that look like this. Development economics chapter 5 pearsons flashcards. Pdf a harristodaro agentbased model to ruralurban migration. The highest income countries such as denmark are also the most urbanized. Part 2 of harris todaro rural to urban labor migration model graphical link to part 1. By simulating this model, we observe a transitional dynamics. The harris todaro model of rural urban migration can be formalized in the following way. According to him, this theory may correspond to the historical scenario of migration in the western socioeconomic milieu but does not explain the trends of ruralurban migration in less.
The harristodaro hypothesis replaces the equality of wages by the equality of expected wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing. Nov 14, 2014 harris todaro model of rural urban migration twosector model of ruralurban migration assumption. The harris todaro migration model 5 as a result, many people end up in relatively unproductive deadend service sector jobs in the cities. Lewis model suggests the problem is too little ruralurban migration, so policymakers should focus on increasing migration ows but many urban migrants do not get good jobs and remain in unproductive informal sector, besides raising social tensions and straining urban facilities.
The role of agriculture in the development process. Without employment subsidies, laissezfaire migration is excessive unless real wage flexibility and agglomeration effects are high. The main assumption of the model is that the migration decision is based on expected income differentials between rural and urban areas rather than just. Harris and michael todaro, is an economic model developed in 1970 and used in development economics and welfare economics to explain some of the issues concerning rural urban migration. If, in the resulting migration, there are more workers than the number of job opportunities created in the urban sector, some will necessarily be unemployed. Harris todaro model of rural urban migration twosector model of ruralurban migration assumption.
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