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The Role of Institutions in Rural-Urban Migration and Urban Unemployment in LDCs: With and Without Changing Level of Indebtedness of the Peasantry

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  • TAMAL DATTA CHAUDHURI

    (Hopkins University, Baltimore, Md. (USA),)

Abstract

This paper attempts to formalise and integrate the roles of "rural push" and "urban pull" factors in rural-urban migration and urban unemployment. Perpetual indebtedness of the peasantry and a monopolistic moneylender, combined with the Harris-Todaro framework, constitute the model. Analysis reveals that such measures might fall short of their goal since the moneylender syphons off part of the benefits that are supposed to accrue to the workers. Possibilities of non-existence of equilibrium and multiple equilibria are pointed out in this model.

Suggested Citation

  • Tamal Datta Chaudhuri, 1982. "The Role of Institutions in Rural-Urban Migration and Urban Unemployment in LDCs: With and Without Changing Level of Indebtedness of the Peasantry," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 21(2), pages 127-147.
    • Handle: RePEc:pid:journl:v:21:y:1982:i:2:p:127-147
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    References listed on IDEAS

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    1. Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February.
    2. Gersovitz, Mark, 1974. "Aggregate demand, the wage gap and unemployment in LDC's," Journal of Development Economics, Elsevier, vol. 1(3), pages 235-246, December.
    3. J. Bhagwati & T. N. Srinivasan, 1973. "The Ranking of Policy Interventions Under Factor Market Imperfections: The Case of Sector-Specific Sticky Wages and Unemployment," Working papers 100, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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