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Internal Migration Restrictions And Labor Allocation In Developing Countries

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  • PETER RANGAZAS

    (Economics Department, Indiana University — Purdue University Indianapolis (IUPUI), 420 University Blud, Indianapolis, IN 46202, USA)

  • XIAOBING WANG

    (Economics Department, University of Manchester, Oxford Rd, Manchester M13 9PL, UK)

Abstract

We develop a simple model with endogenous rural–urban migration to analyze the implications of migration restrictions for economic welfare. The model reveals that a combination of an efficient urban bias in public service provision and internal migration restrictions can raise social welfare. Our results suggest that migration restrictions should be carefully assessed as a policy choice rather than immediately dismissed as suboptimal. However, even when restrictions raise social welfare, they increase urban households’ welfare at the expense of rural households’ welfare, creating an equity tradeoff for policy-makers to consider.

Suggested Citation

  • Peter Rangazas & Xiaobing Wang, 2019. "Internal Migration Restrictions And Labor Allocation In Developing Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(02), pages 263-279, March.
    • Handle: RePEc:wsi:serxxx:v:64:y:2019:i:02:n:s0217590817470051
    DOI: 10.1142/S0217590817470051
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    References listed on IDEAS

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    Cited by:

    1. Nanak Kakwani & Xiaobing Wang & Ning Xue & Peng Zhan, 2022. "Growth and Common Prosperity in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(1), pages 28-57, January.
    2. Yangyang Shen & Shi Li & Xiaobing Wang, 2021. "Impacts of Two Tax Reforms on Inequality and Welfare in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(3), pages 104-134, May.
    3. Peter Rangazas & Xiaobing Wang & Yuxiang Zou, 2022. "China's efficient urban bias," Pacific Economic Review, Wiley Blackwell, vol. 27(3), pages 223-253, August.

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