To What Extent Urban Employment Is the Function of Rural-Urban Migration in Developing Countries - Coursework Example

Order#416811 To what extend urban employment is the function of rural- urban migration in developing countries. Introduction In developing countries, the migration from rural to urban areas forms an important part of urbanization process and the last two decades witnessed large movement of population from rural to urban areas in developing and under developed countries. Now migration can be considered a significant feature of livelihood in developing countries. But migration has become an important source of many social and economic problems in these countries. Even if the workers are unlikely to find jobs, evidence shows that, rural workers migrate to the cities with the expectation of hitting the jackpot by obtaining high –income employment. Workers in the rural areas are attracted to the cities, not because they are assured of increase in wages, but because they gamble on being absorbed in high wage employment and remain as unemployed or accept low wages in the labor market for a period of time in the expectation of achieving a high life time income. However, the chances of hitting the jackpot fall and more and more rural workers remain unemployed. Theoretical framework Until 1960, minimal degree of importance was received to the problem of urban unemployment and under employment faced by most of the developing countries. Since 1960 many studies and literature have addressed the issue of ‘migration and urban unemployment’. The pioneer as well as the most important step in this regard was done by Todaro (1969) and Harris and Todaro (1979). The models have provided a widely accepted theoretical framework for the explanation of urban unemployment in many developing countries. As per this model, migrants compare expected wages in the city to alternative rural income. If the expected wages in the urban sector are higher, people in the rural areas will be attracted to the cities. Migrants may be willing to endure a period of unemployment if expected urban income is sufficiently high. The following figure explains Todaro’s expected income. According to Harris-Todaro (HT) Model, an increase in urban employment may actually result in higher levels of urban unemployment and even reduced national income (Todaro Paradox). HT model assumed that potential migrants would respond to the urban employment probability and rural-urban migration primarily might be treated as an economic phenomenon. The paradox in the urban labor market occurs because of the assumption that in choosing between labor markets, expected wages are considered by the risk-neutral agents. The model also assumed that the probability of obtaining urban employment was calculated approximately by the ratio of urban jobs to the urban labor force and the urban wage rate is considerably higher than the rural wage rate. Under these assumptions, urban unemployment was mandated by the inter-labor market equilibrium. But this unemployment ensures that the expected urban wage is equal to the rural wage (which is constant throughout). On the one side the pulling factor of the higher expected urban income exists while on the other the low income in rural area acts as a push factor. Decline in agricultural commodity prices results in decline in rural income, which is highly vulnerable to world market price fluctuations. Out-migration from rural areas may also be due to the agricultural land shortage which is caused by population density and environment degradation. Moreover, higher agricultural productivity releases people and resources for migration. Rural-urban migration and industrial urban unemployment Urban unemployment is highly of industrial unemployment. Population in urban area has grown faster than in rural areas because of migration on a large scale from villages to cities. The industrial growth in India and other developing countries has been very modest and thus could not absorb all those who migrated to cities with the hope of getting some job. The decline of cottage and small industry in the country- side has further contributed to migration of labor from the country side to urban centres. Industrial concentration in big cities attracts workforce in a big way- much more than what the industries can absorb at any point of time. The situation of industrial unemployment attributable to migration from rural, is commonly seen in the developing countries of India, Pakistan, and other Asian countries (Kapila, 2000; Hermann, 2006). Evidences of Rural- Urban Migration and Urban Unemployment Internal migration of rural-urban movement is a essential and inevitable change in the spatial distribution of population in a given country over period of time. Changes in the spatial distribution of population and migration are influenced by the features related to the economic development process (Ammassari, 1994). As Table 1 shows developing countries are experiencing rapid rates urban population growth. The migration of the labor force from rural to urban markets has been a major source for the growing urbanization (Twumasi, 1995; Ali, 2008) that the internal migration accounted for 40.3%, 44.1% and 54.3% of urban population growth in the under developed countries during 1960’s, 1970’s and 1980’s respectively (Saracoglu and Roe, 2004). In most of the developing countries, occupational distribution is mainly in favor of primary sector in particular agriculture. Nearly 70-75 percent of the total workers is concentrated on agriculture sector during 1980’s and this has considerably decreased over the years. Now due to many factors, occupational shift occurred towards industrial sector and tertiary sector and consequently, a large shift happened from rural to urban. Table 1 Importance of Rural-Urban Migration as a Source of Urban Population Growth in Selected Developing Countries Countries Annual Urban Growth (%) Share of Growth due to Migration (%) Argentina 2 35 Brazil 4.5 36 Colombo 4.9 43 India 3.8 45 Indonesia 4.7 49 Nigeria 7 64 Philippines 4.8 42 Sri Lanka 4.3 61 Tanzania 7.5 64 Thailand 5.3 45 Source: K .Newland, City Limits: Emerging Constraints on Urban Growth, world watch Paper It is seen that like urbanization, urban unemployment has been increasing over the years (see Table 2). In most of the developing countries urban unemployment stands above 10 percent. Another feature of urban unemployment is the existence of educated unemployment and underemployment. In all developing countries migration is concentrated among the people in the age group of 15-30 with a substantial portion in the 15-24 sub-group. This is highly attributed to the economic factors that lifetime income gains are largest for the youth. The empirical evidences from most of the developing nations show that the probability of migration is generally higher for the more educated. For example, in Colombia, the migration rate is four times higher for educated youth than for the uneducated people. Earlier also migration studies and surveys describe that the typical migrant from rural to urban is young and better educated than the average rural resident. Concluding remarks The pressure on land leads to mobility towards urban areas in search of employment while increased migration from rural to urban as well as agriculture to industry again poses the problem of unemployment. The theoretical frame and empirical evidences in the above discussion point out to this phenomenon of transition of labor force from rural to urban and the resultant urban employment and under employment in most of the developing countries. References Kapila, Uma. (2000). “Indian Economy- Issues in Development and Planning and Sectoral analysis”, Academic foundation, New Delhi. Hermann, M. (2006). “Structural Change in Labor Surplus Economies: Evidence from Least Developed counties”, Background Report to the Least Developed Countries Report 2006, UNCTAD, Geneva Fei, J. and G. Ranis (1964). Development of the labor Surplus Economy, Homewood, IL, Irwin Harris, J.R. and M.P. Todaro (1970). “Unemployment and Development: A Two-Sector Analysis”, The American Economic Review, Vol.60 (1), 126-142. Todaro, M.P. (1969). “ A Model of Labor Migration and Urban Unemployment in Less Developed Countries”, The American Economic Review, Vol.59 (1), 138-148. Ammassari, S. 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