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Urban‐Rural Migration: Uncertainty And The Effect Of A Change In The Minimum Wage

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  • Charles A. Ingene
  • Eden S. H. Yu

Abstract

ABSTRACT This paper extends the neoclassical, Harris‐Todaro model of urban‐rural migration to the case of production uncertainty in the agricultural sector. A unique feature of the Harris‐Todaro model is an exogenously determined minimum wage in the urban sector that exceeds the rural wage. Migration occurs until the rural wage equals the expected urban wage (“expected” due lo employment uncertainly). The effects of a change in the minimum wage upon regional outputs, resource allocation, factor rewards, expected profits, and expected national income are explored, and the influence of production uncertainly upon the obtained results are delineated.

Suggested Citation

  • Charles A. Ingene & Eden S. H. Yu, 1989. "Urban‐Rural Migration: Uncertainty And The Effect Of A Change In The Minimum Wage," Papers in Regional Science, Wiley Blackwell, vol. 67(1), pages 135-145, January.
    • Handle: RePEc:bla:presci:v:67:y:1989:i:1:p:135-145
    DOI: 10.1111/j.1435-5597.1989.tb01187.x
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