Document Type
Article
Abstract
In this paper we question the pioneering work of Todaro, which states that rural-to-urban labor migration in less developed countries (LDCs) is an individual response to a higher urban expected income. We demonstrate that rural-to-urban labor migration is perfectly rational even if urban expected income is lower than rural income. We achieve this under a set of fairly stringent conditions: an individual decision-making entity, a one-period planning horizon, and global risk aversion. We obtain the result that a small chance of reaping a high reward is sufficient to trigger rural-to-urban labor migration.
Publication Date
1-1-1986
Recommended Citation
Katz, Eliakim and Oded Stark. "Labor Migration and Risk Aversion in Less Developed Countries," Journal of Labor Economics, Vol. 4, No. 1 (1986), pg. 134-149.
Original Citation
Katz, Eliakim and Oded Stark. "Labor Migration and Risk Aversion in Less Developed Countries," Journal of Labor Economics, Vol. 4, No. 1 (1986), pg. 134-149.
Department
Department of Economics
Legacy Department
Department of Economics
Language
eng
Publisher
University of Chicago Press
