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Theoretical and Applied Economics
No. 3 / 2021 (628), Autumn

Rural urban migration with heterogeneous firms, heterogonous laborer and the effect of wage subsidy

University of Calcutta, Kolkata, India
Indian Institute of Foreign Trade, Kolkata, India
University of Calcutta, Kolkata, India

Abstract. Rural urban migration is an important aspect towards the process of urbanization and development and therefore has been a topic of interest and debate for many economists for several decades. As a result, there exists a vast and diverse literature empirical and theoretical on the causes, consequences and therefore policy considerations and implications of rural urban migration. In this paper a few of the empirical observations are incorporated in a general equilibrium model based on Harris Todaro (1970) and Melitz (2003) to make it more realistically relevant. Later the effect a usual policy of rural wage subsidy is observed in the new model.

Keywords: rural urban migration, heterogeneous firms, informal sector, heterogeneous laborer, unemployment, rural wage subsidy.

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The Economicity. The Epistemic Landscape, Marin Dinu, 2016


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