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Unemployment, Migration, and Growth

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Author Info
Bencivenga, Valerie R
Smith, Bruce D

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Abstract

Economic development is typically accompanied by migration from rural to urban employment. This migration is often associated with significant urban underemployment. Both factors are important in the development process. The authors consider a neoclassical growth model with rural-urban migration and urban underemployment, which arises from an adverse selection problem in labor markets. They demonstrate that rural-urban migration and underemployment can be a source of development traps and can give rise to a large set of periodic equilibria displaying undamped oscillation. Many such equilibria display long periods of uninterrupted growth, punctuated by brief but severe recessions. Copyright 1997 by the University of Chicago.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 105 (1997)
Issue (Month): 3 (June)
Pages: 582-608
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Handle: RePEc:ucp:jpolec:v:105:y:1997:i:3:p:582-608

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Rosenzweig, Mark R., 1988. "Labor markets in low-income countries," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 15, pages 713-762 Elsevier. [Downloadable!] (restricted)
  2. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-18, November. [Downloadable!] (restricted)
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  3. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May. [Downloadable!] (restricted)
  4. Reichlin, Pietro, 1986. "Equilibrium cycles in an overlapping generations economy with production," Journal of Economic Theory, Elsevier, vol. 40(1), pages 89-102, October. [Downloadable!] (restricted)
  5. Azariadis, Costas, 1981. "Self-fulfilling prophecies," Journal of Economic Theory, Elsevier, vol. 25(3), pages 380-396, December. [Downloadable!] (restricted)
  6. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September. [Downloadable!] (restricted)
  7. Benhabib, Jess & Day, Richard H., 1982. "A characterization of erratic dynamics in, the overlapping generations model," Journal of Economic Dynamics and Control, Elsevier, vol. 4(1), pages 37-55, November. [Downloadable!] (restricted)
  8. Drazen, Allan & Eckstein, Zvi, 1988. "On the Organization of Rural Markets and the Process of Economic Development," American Economic Review, American Economic Association, vol. 78(3), pages 431-43, June. [Downloadable!] (restricted)
  9. Mazumdar, Dipak, 1987. "Rural-urban migration in developing countries," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 28, pages 1097-1128 Elsevier. [Downloadable!] (restricted)
  10. Ranis, Gustav, 1988. "Analytics of development: Dualism," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 4, pages 73-92 Elsevier. [Downloadable!] (restricted)
  11. Hatton, Timothy J & Williamson, Jeffrey G, 1992. "What Explains Wage Gaps between Farm and City? Exploring the Todaro Model with American Evidence, 1890-1941," Economic Development and Cultural Change, University of Chicago Press, vol. 40(2), pages 267-94, January.
  12. Mas-Colell, Andreu & Razin, Assaf, 1973. "A Model of Intersectoral Migration and Growth," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 72-79, March. [Downloadable!] (restricted)
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