{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 7.2 notes

They may not be risk neutral o there may also be a

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: rmal sector wage Wt is greater than zero o Probability of unemployment may not be simply ratio of jobs to job seekers o For example, the probability of employment may increase the longer the time spent in the city o Potential migrants look at present discounted value of lifetime income o Migrants may consider expected utility, not just average income, they may not be risk neutral o There may also be a risk to income in rural areas o Moving cost may be significant - The Case for policy o Migration can be understood as rational, so why would be need policy? o Market failures are present o Negative externalities to cities eg: infrastructure o Negative externality to rural areas: loss of relatively better skilled workers o Inefficiently large city scales o Unemployment resources o Other negative externalities: health, etc o Policy implications o Reduce or elimi...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online