Migration, Human Capital, and Poverty in a Dual-Economy Model of a Developing Country

September 1, 2001

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The coexistence of urban and rural poverty and migration to cities is studied in a dual economy model where the acquisition of skills is costly and involves migration to urban areas. In this model, both the distribution of innate abilities and the distribution of wealth matter for the migration decision, and costs of backmigration may produce an urban poverty trap if unemployment lowers household wealth below the cost of skills acquisition.

Subject: Human capital, Income, Labor, Migration, National accounts, Population and demographics, Unemployment, Wages

Keywords: above-market-clearing wage, Africa, Asia and Pacific, development, further migration, Gini coefficient, Human capital, Income, labor force, market clearing wage, migration, migration choice, migration decision, opportunity cost, poverty, poverty issue, poverty trap, sector wage, Unemployment, unemployment rate, utility function, Wages, wealth accumulation, wealth accumulation dynamics, WP

Pages:
36
Volume:
2001
DOI:
https://doi.org/10.5089/9781451855050.001
Issue:
128
Series:
Working Paper No. 2001/128
Stock No:
WPIEA1282001
ISBN:
9781451855050
ISSN:
1018-5941

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