The aim of this paper is the estimation of a migration function between the agricultural and non agricultural sectors of the Chilean economy using time series data. The flows of migration considered are referred to changes of the labor force by sectors of occupation and do not necessarily imply geographical movements of population between rural and urban areas. Although the general theoretical framework to explain migration is related to the Harris-Todaro approach, different specifications of the migration function are investigated. The question about whether the composition of the expected income in each area (between probability of finding a Job and current income of the labor force) affects the flow of migration is analyzed. Also it is examined empirically if the corresponding elasticities are constant or depend on other variables. The issue of which is the relevant measure of income in both sectors is also studied. The alternative migrations equations are first estimated using ordinary least squares and then, to avoid simultaneous equations problems, the instrumental variable estimation technique is used. The results of the "best" equation is in agreement with the a priori theoretical considerations. The predictive power of the chosen equation is remarkably high considering the usual difficulties in predicting a flow variable like migration.
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Article provided by Instituto de Economía. Pontificia Universidad Católica de Chile. in its journal Cuadernos de Economía.
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