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The Earnings Experience of Rural-Urban Migrants in Korea

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  • Bun Song Lee
  • Joseph Phillips
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    Abstract

    Migration models in the Harris-Todaro tradition imply that urban informal sector earnings are less than rural sector earnings. Examining the situation for Korea, we find that both urban formal and informal sector earnings exceed earnings opportunities in rural areas, making rural-urban migration the best decision for the individual and for the Korean economy in terms of maximizing output. A Dutch Disease model is offered as an explanation for the unexpected strength of urban informal sector earnings. The implication for policy makers is that government efforts may be better directed toward mitigating the externalities caused by over-crowding, rather than attempting to influence population movements. [J31]

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal International Economic Journal.

    Volume (Year): 11 (1997)
    Issue (Month): 4 ()
    Pages: 85-101

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    Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:85-101

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    1. Hakchung Choo, 1982. "Widening Urban-Rural Income Differentials in Korea: A Reexamination," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 19(1), pages 115-147, March.
    2. Mazumdar, Dipak, 1976. "The urban informal sector," World Development, Elsevier, vol. 4(8), pages 655-679, August.
    3. Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March.
    4. Mazumdar, Dipak, 1976. "The Rural-Urban Wage Gap, Migration, and the Shadow Wage," Oxford Economic Papers, Oxford University Press, vol. 28(3), pages 406-25, November.
    5. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    6. Stahl, Konrad, 1983. "A note on the microeconomics of migration," Journal of Urban Economics, Elsevier, vol. 14(3), pages 318-326, November.
    7. Todaro, Michael P, 1986. "Internal Migration and Urban Employment: Comment," American Economic Review, American Economic Association, vol. 76(3), pages 566-69, June.
    8. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    9. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
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    Cited by:
    1. Elizabeth Monk-Turner & Charlie Turner, 2001. "Sex Differentials in Earnings in the South Korean Labor Market," Feminist Economics, Taylor & Francis Journals, vol. 7(1), pages 63-78.
    2. Edwin S. Wong, 2013. "Gender preference and transfers from parents to children: an inter-regional comparison," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(1), pages 61-80, January.

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