Social influence, agent heterogeneity and the emergence of the urban informal sector
We develop an agent-based computational model in which the urban informal sector acts as a buffer where rural migrants can earn some income while queuing for higher paying modern-sector jobs. In the model, the informal sector emerges as a result of rural–urban migration decisions of heterogeneous agents subject to social influence in the form of neighboring effects of varying strengths. Besides using a multinomial logit choice model that allows for agent idiosyncrasy, explicit agent heterogeneity is introduced in the form of socio-demographic characteristics preferred by modern-sector employers. We find that different combinations of the strength of social influence and the socio-economic composition of the workforce lead to very different urbanization and urban informal sector shares. In particular, moderate levels of social influence and a large proportion of rural inhabitants with preferred socio-demographic characteristics are conducive to a higher urbanization rate and a larger informal sector.
Volume (Year): 391 (2012)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/|
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.:
- Prabir C. Bhattacharya, 2002. "Rural-to-urban migration in LDCS: a test of two rival models," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(7), pages 951-972.
- Kannappan, Subbiah, 1985. "Urban Employment and the Labor Market in Developing Nations," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 699-730, July.
- Weisbuch, Gérard & Mangalagiu, Diana & Ben-Av, Radel & Solomon, Sorin, 2008. "Simple models of firms emergence," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(21), pages 5231-5238.
- Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
- J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar.
- Yuki, Kazuhiro, 2008.
"Sectoral Shift, Wealth Distribution, And Development,"
Cambridge University Press, vol. 12(04), pages 527-559, September.
- Yuki, Kazuhiro, 2007. "Sectoral Shift, Wealth Distribution, and Development," MPRA Paper 3384, University Library of Munich, Germany.
- Kazuhiro Yuki, 2005. "Sectoral Shift, Wealth Distribution, and Development," Development and Comp Systems 0509001, EconWPA.
- 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.
- Fortin, Bernard & Marceau, Nicolas & Savard, Luc, 1997. "Taxation, wage controls and the informal sector," Journal of Public Economics, Elsevier, vol. 66(2), pages 293-312, November.
- John D. Sterman & Rebecca Henderson & Eric D. Beinhocker & Lee I. Newman, 2007. "Getting Big Too Fast: Strategic Dynamics with Increasing Returns and Bounded Rationality," Management Science, INFORMS, vol. 53(4), pages 683-696, April.
- Tokman, Victor E., 1978. "An exploration into the nature of informal--formal sector relationships," World Development, Elsevier, vol. 6(9-10), pages 1065-1075.
- repec:cup:cbooks:9780521698030 is not listed on IDEAS
- Silveira, Jaylson J. & Espíndola, Aquino L. & Penna, T.J.P., 2006. "Agent-based model to rural–urban migration analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 364(C), pages 445-456.
- Townsend, R.F. & Kirsten, J. & Vink, N., 1998.
"Farm size, productivity and returns to scale in agriculture revisited: a case study of wine producers in South Africa,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 19(1-2), September.
- Townsend, R. F. & Kirsten, J. & Vink, N., 1998. "Farm size, productivity and returns to scale in agriculture revisited: a case study of wine producers in South Africa," Agricultural Economics, Blackwell, vol. 19(1-2), pages 175-180, September.
- Elson, Diane, 1999. "Labor Markets as Gendered Institutions: Equality, Efficiency and Empowerment Issues," World Development, Elsevier, vol. 27(3), pages 611-627, March.
- repec:cup:cbooks:9780521875325 is not listed on IDEAS
- He, Mingfeng & Li, Chuan & Tong, Tong & Ma, Tianliang, 2008. "A model of peasant labor in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(7), pages 1621-1627.
When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:391:y:2012:i:4:p:1563-1574. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.