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Lecture Development economics - Lecture 20: Michael P. Todaro's Model of Rural-Urban Migration

The unlimited supplies of labor models as presented by Lewis and Ranis-Fei failed to pay attention over migration. They stressed upon saving, investment, growth rate and productive efficiency. But during 1960s the economists realized that the dual economy models presented by Lewis and Ranis-Fei do not have compatibility with the circumstances of UDCs as they are furnished with certain social and economic structure. | Michael P. Todaros Model of Rural-Urban Migration Lecture 20 The unlimited supplies of labor models as presented by Lewis and Ranis-Fei failed to pay attention over migration. They stressed upon saving, investment, growth rate and productive efficiency. But during 1960s the economists realized that the dual economy models presented by Lewis and Ranis-Fei do not have compatibility with the circumstances of UDCs as they are furnished with certain social and economic structure. In case of UDCs it is being observed that inspite of heavy unemployment and under employment in urban areas a big migration is taking place from rural areas to urban areas. This situation contradicts Lewis model. As during 1960s to 1970s the urban population increased by 60%, 52% and 51% in Africa, Latin America and South Asia respectively. While in these regions the rural population increased by 16%. This shows that the massive unemployment exists in the urban areas of these regions. This, according to Todaro, is due to that mobility and migration which is taking place from rural areas to urban areas. Thus, the Todaro model of rural-urban migration states: "Despite mass unemployment in cities people are migrating from villages to towns and cities". Assumptions of the Model: (i) The migration is assumed to be an economic phenomenon. (ii) The migrants make migration to cities on economic grounds, even if they know that heavy unemployment exists in cities. (iii) The migrants are well aware of with the employment opportunities in rural and urban labor markets. Accordingly, they choose any one of them where their expected gains could be maximized. Thus, the migration proceeds in response to urban-rural differences in expected rather than actual earnings. (iv) The expected gains are measured by (a) the difference in real incomes between rural and urban work, and (b) the probability of a new migrant obtaining an urban job. "The members of labor force, both actual and potential, compare their . | Michael P. Todaros Model of Rural-Urban Migration Lecture 20 The unlimited supplies of labor models as presented by Lewis and Ranis-Fei failed to pay attention over migration. They stressed upon saving, investment, growth rate and productive efficiency. But during 1960s the economists realized that the dual economy models presented by Lewis and Ranis-Fei do not have compatibility with the circumstances of UDCs as they are furnished with certain social and economic structure. In case of UDCs it is being observed that inspite of heavy unemployment and under employment in urban areas a big migration is taking place from rural areas to urban areas. This situation contradicts Lewis model. As during 1960s to 1970s the urban population increased by 60%, 52% and 51% in Africa, Latin America and South Asia respectively. While in these regions the rural population increased by 16%. This shows that the massive unemployment exists in the urban areas of these regions. This, according to Todaro, .