Unemployment, Migration, and Growth
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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- 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.
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- 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 431-443, June.
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- 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 267-294, January. Full references (including those not matched with items on IDEAS)
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