Answer to Question #125078 in Economics for Joseph Danso

Question

With the aid of either Todaro or Harris-Todaro migration model, explain the continued process of rural-urban migration despite growing unemployment in urban areas

Answer 1

Population migration is a multidimensional phenomenon, the causes and consequences of which should be considered at the macro and micro levels and only in the context of other social, economic, demographic, and political processes. The decision on migration is always (unless it comes to forced displacement) made at the micro level - at the level of the individual, family, household. However, the adoption of this decision is influenced by the many circumstances within which individuals, families and households operate.

Similarly, the effects of migration not only affect the direct participants in the movement process, but also affect all the structures in which they existed before and after the act of migration, including the abandoned settlement and country, the host society, the state of destination, and, in a sense, the established world economic relations.

If migrations are massive, these interactions are especially noticeable. They can change - already under the influence of migration processes - and stimulate new waves of migration. A theoretical understanding of this complex system of relationships is possible only on the basis of a systematic approach. Therefore, a systematic, integrated approach is the main methodological principle of the study of migration.

Neoclassical theory. In the framework of the economic direction in the study of migration, a neoclassical approach is undoubtedly distinguished, primarily in terms of its impact on the formation of migration concepts and models. The main point of the neoclassical theory of migration is that the causes of migratory mobility of the population are the differences in wage levels between regions / countries of origin and destination of migrants. It originated in the framework of a more general neoclassical economic theory, explaining the movement of factors of production, including labor, the existing economic inequality between countries.

Initially, the neoclassical theory of migration was applied to explain internal migration, primarily migration from village to city. M. Todaro and J. Harris developed a logical model (the Todaro – Harris model) that explains why rural populations move to urban centers in developing countries, despite rising unemployment in cities [Harris, Todaro 1970]. The authors suggested that as long as the difference in wage levels between the destination area (city) and the departure area (rural area) remains significant enough to “outweigh” the risk of remaining unemployed, the migration flow continues.

Later, the model of Todaro - Harris was refined and improved, which made it closer to reality [Todaro, Maruszko 1987; Schiff 1994]. The improvement consisted in the fact that, in addition to unemployment, the analysis included other factors that influence the decision on migration in terms of possible costs, for example, the cost of moving and arranging and the "psychological costs" of migration associated with separation from relatives, the gap with the familiar social environment, etc. [Bauer, Zimmermann 1998: 97].