Rural-Urban Migration

Neoclassical Theories

The Harris-Todaro model and the Lewis dual sector model are two of the representative neoclassical economic theories illustrating the dynamics of rural-urban migration.

The Harris-Todaro model argues that rural-urban migration is mostly an economic decision [Page 2496]based on expected income differentials between rural and urban areas. Individuals or households make a cost-benefit calculation by comparing the expected earnings in the cities with the prevailing wages in the rural areas, and if the former exceeds the latter, migration will take place. Therefore, rural-urban migration will continue as long as the expected urban real income at the margin surpasses real agricultural returns. Migration can be seen as an equilibrating force that equates rural and urban expected incomes in the long run.

According to the Lewis dual sector model, migration occurs between the traditional agricultural sector and the modern industrial sector. The rural agricultural sector is characterized by low productivity, low wages, and excess labor, whereas the industrial sector in cities is defined by higher productivity, higher wage rates, and more job opportunities. Due to the wage differential between the agricultural and manufacturing sectors, the rural surplus labor will tend to transfer from the agricultural to the manufacturing sector over time to garner higher monetary reward. Eventually, the agricultural wage will rival the manufacturing wage, and the agricultural marginal product of labor will keep pace with the manufacturing marginal product of labor.

Household Strategy Approach

In the household strategy approach, rural-urban migration is a strategy adopted by households to maximize and diversify their earnings and minimize their risks against market failures as well as natural catastrophes. Net family gain, rather than net personal gain, encourages migration. The decision is rarely an individual one. It is usually made collectively by immediate and extended family members. Split households may take place as a result of adopting this strategy. Sometimes the husband pursues migrant work in the city and the wife stays behind to take care of the family as well as hold on to the land. During the busy season in agriculture or when family needs become urgent, migrant(s) may return temporarily to help. The remittances that migrants send back help pay the living and agricultural expenses and alleviate poverty in the household. The reason for split migration may be that the family would want to reduce risk as well as migration cost, which can be expensive. It also allows migrants to straddle and benefit from both the rural segment and the urban segment. When migrants settle down in cities and achieve economic success and stability, family migration may occur, which means that the rest of the family members will join the migrants in the cities.

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