Rural-urban migration and unemployment : theory and policy implications

Auteur :
ZENOU, Y.

Description :
A regional model is developed where, in the city, unemployment prevails because of too high (efficiency) wages, while, in the rural area, workers are paid at their marginal productivity. The steady-state equilibrium is characterized and it is shown that it is unique. Two policies are considered : decreasing urban unemployment benefits and subsidizing urban employment. Decreasing the unemployment benefit in the city creates urban jobs and reduces rural–urban migration since new migrants have to spend some time unemployed before they can find a job in the city. Raising employment subsidies increases urban employment but may also increase urban unemployment because it triggers more rural–urban migration.


Type de document :
Article de périodique

Source :
Journal of regional science, issn : 0022-4146, 2011, vol. 51, n°. 1, p. 65-82, nombre de pages : 18, Références bibliographiques : 2 p.

Date :
2011

Editeur :
Pays édition : Etats-Unis, Amherst, MA, Regional Science Research Institute