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Reprint of development, agglomeration, and the organization of work

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  • Fafchamps, Marcel

Abstract

This paper discusses how the mechanisms that allocate workers to tasks vary systematically with isolation from markets and hence with distance from urban centers. This in turn affects social norms, household structure, and the perceived benefits of migration. The relevance of the framework is illustrated with empirical evidence from personal research, much of which is based on a detailed analysis of Nepal in the 1990s. The evidence shows that away from cities, economic activity reverts largely around the family and the household. Agglomeration makes gains from specialization possible. This leads to self-employment in non-farm activities, but not necessarily to wage employment. The evidence also shows that proximity to markets generates not only higher monetary income but also welfare gains that attract migrants and foster urbanization.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 5 ()
Pages: 765-778

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Handle: RePEc:eee:regeco:v:42:y:2012:i:5:p:765-778

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Migration; Worker allocation; Hierarchies; Intra-household allocation; Social norms;

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References

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  1. Marcel Fafchamps & Bart Minten, 1999. "Property rights in a flea market economy," Economics Series Working Papers WPS/1999-25, University of Oxford, Department of Economics.
  2. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-66, December.
  3. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
  4. Marcel Fafchamps & Forhad Shilpi, 2003. "Cities and Specialization: Evidence from South Asia," Economics Series Working Papers 139, University of Oxford, Department of Economics.
  5. Geeta G. Kingdon & John B. Knight, 2001. "Unemployment in South Africa: The nature of the beast," CSAE Working Paper Series 2001-15, Centre for the Study of African Economies, University of Oxford.
  6. Fafchamps, Marcel & Quisumbing, Agnes R., 2008. "Household Formation and Marriage Markets in Rural Areas," Handbook of Development Economics, Elsevier.
  7. Fafchamps, Marcel & Wahba, Jackline, 2006. "Child labor, urban proximity, and household composition," Journal of Development Economics, Elsevier, vol. 79(2), pages 374-397, April.
  8. Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, 07.
  9. Marcel Fafchamps & Forhad Shilpi, 2000. "The Spatial Division of Labor in Nepal," Economics Series Working Papers 44, University of Oxford, Department of Economics.
  10. Marcel Fafchamps & Forhad Shilpi, 2006. "Subjective Welfare, Isolation, and Relative Consumption," Economics Series Working Papers GPRG-WPS-056, University of Oxford, Department of Economics.
  11. Fafchamps, Marcel & Quisumbing, Agnes R., 1998. "Human capital, productivity, and labor allocation in rural Pakistan," FCND discussion papers 48, International Food Policy Research Institute (IFPRI).
  12. M. Fafchamps & A. R. Quisumbing, 2002. "Control and Ownership of Assets Within Rural Ethiopian Households," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 47-82.
  13. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
  14. Fafchamps, Marcel & Quisumbing, Agnes R, 2005. "Marriage, Bequest, and Assortative Matching in Rural Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 347-80, January.
  15. Marcel Fafchamps & Forhad Shilpi, 2009. "Determinants of the Choice of Migration Destination," CSAE Working Paper Series 2009-09, Centre for the Study of African Economies, University of Oxford.
  16. Bloch, Francis & Genicot, Garance & Ray, Debraj, 2008. "Informal insurance in social networks," Journal of Economic Theory, Elsevier, vol. 143(1), pages 36-58, November.
  17. Marcel Fafchamps & Agnes Quisumbing, 2004. "Assets at Marriage in Rural Ethiopia," Development and Comp Systems 0409024, EconWPA.
  18. Pieter Serneels, 2007. "The Nature of Unemployment among Young Men in Urban Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 170-186, 02.
  19. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  20. David McKenzie & Steven Stillman & John Gibson, 2010. "How Important is Selection? Experimental VS. Non‐Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 913-945, 06.
  21. David McKenzie & John Gibson & Steven Stillman, 2006. "How Important is Selection? Experimental vs Non-experimental Measures of Income Gains from Migration," Working Papers in Economics 06/03, University of Waikato, Department of Economics.
  22. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February.
  23. Marcel Fafchamps & Klaus Desmet, 2003. "Employment Concentration across US Counties," Economics Series Working Papers 180, University of Oxford, Department of Economics.
  24. Jean-Philippe Platteau, 2000. "Allocating and Enforcing Property Rights in Land: Informal versus Formal Mechanisms in Subsaharan Africa," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 26, pages 55-81.
  25. David McKenzie & John Gibson & Steven Stillman, 2006. "How Important is Selection? Experimental vs Non-experimental Measures of the Income Gains of Migration," Working Papers 06_02, Motu Economic and Public Policy Research.
  26. Marcel Fafchamps & Agnes R. Quisumbing, 2000. "Social Roles, Human Capital, and the Intrahousehold Division of Labour: Evidence from Pakistan," Economics Series Working Papers 11, University of Oxford, Department of Economics.
  27. Marcel Fafchamps & Forhad Shilpi, 2009. "Isolation and Subjective Welfare: Evidence from South Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 641-683, 07.
  28. Klaus Desmet & Marcel Fafchamps, 2005. "Changes in the spatial concentration of employment across US counties: a sectoral analysis 1972--2000," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 261-284, June.
  29. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, octubre-d.
  30. Marcel Fafchamps & Bereket Kebede & Agnes R. Quisumbing, 2009. "Intrahousehold Welfare in Rural Ethiopia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(4), pages 567-599, 08.
  31. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  32. McKenzie, David & Gibson, John & Stillman, Steven, 2006. "How important is selection ? Experimental versus non-experimental measures of the income gains from migration," Policy Research Working Paper Series 3906, The World Bank.
  33. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364.
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