Migration, Human Capital, and Poverty in a Dual-Economy of a Developing Country

Abstract

The coexistence of urban and rural poverty and migration to cities is studied in a dual economy model where the acquisition of skills is costly and involves migration to urban areas. In this model, both the distribution of innate abilities and the distribution of wealth matter for the migration decision, and costs of backmigration may produce an urban poverty trap if unemployment lowers household wealth below the cost of skills acquisition.Migration;Poverty;Development;wage, unemployment, employment, unemployed, agricultural wage, urban unemployment, unemployment rate, wages, agricultural labor force, urban employment, aggregate unemployment, skilled labor, wage rates, unemployment equilibrium, wage subsidy, informal sector employment, employment opportunities, minimum wage, wage incentive, agricultural wages, wage incentives, informal sector ? employment, unemployed labor, employment rate, rate of unemployment, equilibrium unemployment, urban labor force, labor force growth, minimum wages, wage determination, rural employment, agricultural employment