TheTodaromodelHypotheses1-Migrationisanindividual.pptVIP

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TheTodaromodelHypotheses1-Migrationisanindividual.ppt

TheTodaromodelHypotheses1-Migrationisanindividual.ppt

The Todaro model Hypotheses: 1-Migration is an individual rational decision 2-Migration proceeds in response to urban-rural differences in expected income rather than actual earnings 3. Compare of expected incomes for a given time horizon in the urban sector (returns minus costs of migration) with prevailing average rural incomes in a context of a urban job lottery The Harris -Todaro Model If wages were perfectly flexible, equal wages would be paid in industry and agriculture and there would be no involuntary unemployment * In a perfectly competitive labor market * For a variety of reasons how

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