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Insurance Motives for Rural-to-Urban Migration

Listed author(s):
  • Ahsan, S.Q.
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    In this paper, we attempt to develop an intertemporal model of rural-to-urban migration in the context of a poor rural economy. With a peasant household as the decision making unit we explore how rural-to-urban migration may be adopted as a strategy mto cope with the income risks arising from employment uncertainties. In particular, we show that it may be optimal for households, in the absence of formal insurance markets, to allocate some of their labour power to urban labour market, i.e., send some household members to the coty to seek unskilled jobs and thereby achieve an optimal risk spreading, given that the income risks in urban and rural labour markets respectively are idissyncratic.

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    Paper provided by Department of Economics, University of Bergen in its series Norway; Department of Economics, University of Bergen with number 0698.

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    Length: 18 pages
    Date of creation: 1998
    Handle: RePEc:fth:bereco:0698
    Contact details of provider: Postal:
    Department of Economics, University of Bergen Fosswinckels Gate 6. N-5007 Bergen, Norway

    Phone: (+47)55589200
    Fax: (+47)55589210
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