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Informality, city structure and rural–urban migration in Latin America

Author

Listed:
  • Héctor M. Posada

    (Universidad de Antioquia)

  • Ana I. Moreno-Monroy

    (Autonomous University of Barcelona)

Abstract

In this paper, we study the relationship between informal employment and city structure, in the presence of informal housing. We build an urban search-matching model incorporating informal labor, informal housing, and rural–urban migration. We find that a greater decentralization of informal jobs leads to a higher informality rate in the labor market. This, in turn, pushes the expected income in the city downward and reduces incentives for rural workers to migrate. Surprisingly, rural–urban migration increases. This happens because greater decentralization relaxes the competition for land throughout the city, which reduces urban costs for all urban residents and effectively increases the expected income in the city.

Suggested Citation

  • Héctor M. Posada & Ana I. Moreno-Monroy, 2017. "Informality, city structure and rural–urban migration in Latin America," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 345-369, September.
    • Handle: RePEc:spr:anresc:v:59:y:2017:i:2:d:10.1007_s00168-017-0834-5
    DOI: 10.1007/s00168-017-0834-5
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    Cited by:

    1. Busso, Matias & Chauvin, Juan Pablo & Herrera L., Nicolás, 2021. "Rural-urban migration at high urbanization levels," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    2. Marco Baudino, 2021. "Rural-to-urban migration in developing economies: characterizing the role of the rural labor supply in the process of urban agglomeration and city growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(3), pages 533-556, June.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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