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Dynamic control of rural-urban migration

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  • Itoh, Ryo

Abstract

This study investigates the optimal urbanization control of an underdeveloped economy by specifying a simple dynamic rural-urban model in which the urban sector bears both an intertemporal positive externality and a simultaneous negative externality. The dynamic optimization problem is solved for the political intervention of the central government in an intersectoral population distribution with taxes and subsidies. Our analysis provides the following results: (i) a big-push policy that leads an economy to a higher-income steady state with urbanization is not necessarily desirable if the government cannot borrow money at a sufficiently low interest rate; (ii) in order to sustain an appropriate urbanization speed, urbanization control policy should have a switch: the urban sector should be subsidized in order to accelerate rural-urban migration in early stages of development, and taxed to decelerate and eventually cease the migration in later stages.

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  • Itoh, Ryo, 2009. "Dynamic control of rural-urban migration," Journal of Urban Economics, Elsevier, vol. 66(3), pages 196-202, November.
    • Handle: RePEc:eee:juecon:v:66:y:2009:i:3:p:196-202
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    Cited by:

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    2. Ertuğrul Güreşci, 2014. "The Positive Impact of Rural Migration," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 1, May - Aug.
    3. Jing Li & Meng Guo & Kevin Lo, 2019. "Estimating Housing Vacancy Rates in Rural China Using Power Consumption Data," Sustainability, MDPI, vol. 11(20), pages 1-13, October.
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    5. Cai, Ning & Ma, Hai-Ying & Khan, M. Junaid, 2015. "Agent-based model for rural–urban migration: A dynamic consideration," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 806-813.
    6. Calin Arcalean & Gerhard Glomm & Ioana Cosmina Schiopu, 2019. "Urbanization, productivity differences and spatial frictions," CESifo Working Paper Series 7609, CESifo.

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