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Rural urban migration
The document presents a lecture on rural-urban migration delivered at Makerere University, discussing the Lewis-Fei-Ranis model and its assumptions regarding movement from traditional to modern economic sectors. It highlights the strengths and weaknesses of the model, including the failure to account for unemployment dynamics in urban areas and the constant wage assumption. Additionally, an 'expected income' model is introduced, which considers social and demographic factors affecting migration decisions.
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This presentation introduces the topic of Rural-Urban Migration and sets the context for the lecture.
The lecture aims to discuss the Lewis-Fei-Ranis model, its strengths, weaknesses, and the implications of an expected income model.
Introduces the Lewis-Fei-Ranis model, created by W. Arthur Lewis and formalized by Ranis and Fei, as a prominent model in development economics.
Lays out key assumptions regarding two economic sectors, labor movement, productivity differences, and wage influences.
Details the Lewis model's graphical representation, labor supply elasticity, total modern employment, capital stock growth, and profit reinvestment.
Highlights the model's analytical strengths in explaining employment issues and the dynamics of rural-urban labor transfer.
Identifies critical weaknesses including assumptions on labor transfer, income distribution, urban employment, and wage constancy in developing contexts.
Introduces the 'expected income' model which emphasizes the expected earnings as a driving factor for migration.
Discusses major social, physical, demographic, and cultural factors affecting migration, identifying push and pull factors.
Outlines assumptions in migration patterns including demographic factors, education levels, distance of migration, and the influence of policies.
Concludes the presentation with a thank you note, summarizing the discussion on rural-urban migration.
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Rural urban migration
- 1. Rural-Urban MigrationRural-Urban Migration ALecture Delivered to Undergraduate Students taking Rural Development at the then Faculty of Agriculture, Makerere University, Kampala, Uganda in April 2008 By Mangasini A. Katundu Moshi Co-operative University, Tanzania
- 2. ObjectivesObjectives To discuss thebasic features andTo discuss the basic features and assumptions of Lewis-Fei-Ranisassumptions of Lewis-Fei-Ranis modelmodel To discuss strength andTo discuss strength and weaknesses of Lewis-Fei-Ranisweaknesses of Lewis-Fei-Ranis modelmodel To outline the main features of anTo outline the main features of an “expected income” model and their“expected income” model and their policy implicationpolicy implication
- 3. The Lewis-Fei-Ranis modelTheLewis-Fei-Ranis model
- 4. The Lewis-Fei-Ranis modelTheLewis-Fei-Ranis model Also known asAlso known as the Lewis-Fei-Ranisthe Lewis-Fei-Ranis model of developmentmodel of development Is the best known modelIs the best known model Created by a Nobel Laureate W.Created by a Nobel Laureate W. Arthur Lewis in 1954Arthur Lewis in 1954 Formalized in1961 by prof. GustavFormalized in1961 by prof. Gustav Ranis and John FeiRanis and John Fei
- 5. Basic assumptions ofthe modelBasic assumptions of the model
- 6. Basic assumptions ofthe modelBasic assumptions of the model 1:1: Underdeveloped economies likeUnderdeveloped economies like Uganda consists of two sectors:Uganda consists of two sectors: A traditional subsistence sectorA traditional subsistence sector ruralrural A high productivity modern industrialA high productivity modern industrial sectorsector urbanurban
- 7. Basic assumptions ofthe modelBasic assumptions of the model 2: People normally move from a traditional2: People normally move from a traditional subsistence sector to modern urbansubsistence sector to modern urban industrial sector for economic reasonsindustrial sector for economic reasons traditional modern Economic reasons
- 8. Basic assumptions ofthe modelBasic assumptions of the model 3:3: traditional subsistence sector consist oftraditional subsistence sector consist of zero or very low productivity andzero or very low productivity and surplus labour whilesurplus labour while discouraging factordiscouraging factor 4: modern urban industrial sector is4: modern urban industrial sector is characterized by high productivity andcharacterized by high productivity and employment opportunitiesemployment opportunities encouraging factorencouraging factor
- 9. Basic assumptions ofthe modelBasic assumptions of the model 5:5: both labour transfer and urban employmentboth labour transfer and urban employment growth are bought about by output expansiongrowth are bought about by output expansion in the modern sectorin the modern sector 6: the speed with which they occur is given by6: the speed with which they occur is given by the rate of investment or capital accumulationthe rate of investment or capital accumulation in the modern sectorin the modern sector 7: urban wages would have to be at least 30%7: urban wages would have to be at least 30% higher than average rural income to inducehigher than average rural income to induce workers to migrate from their home areasworkers to migrate from their home areas
- 10. Basic assumptions ofthe modelBasic assumptions of the model 8:8: the level of wages in the industrialthe level of wages in the industrial sector is assumed to be constantsector is assumed to be constant 9: However, at this constant urban9: However, at this constant urban wage, the supply of rural labour iswage, the supply of rural labour is considered to be perfectly elasticconsidered to be perfectly elastic
- 11. The Lewis ModelTheLewis ModelReal wageReal wage WW AA Quantity of labourQuantity of labour s F G H 0 L1 L2 L3 D1 D2 D3 D1(K1) D2(K2) D3(K3) K3 K2 K1 modern sector > > wages profits
- 12. The Lewis ModelTheLewis Model OA represents the average level of realOA represents the average level of real subsistence income to traditionalsubsistence income to traditional rural sectorrural sector OW real wage in the capitalist sectorOW real wage in the capitalist sector At this wage the supply of labour isAt this wage the supply of labour is assumed to be “unlimited” or perfectlyassumed to be “unlimited” or perfectly elastic, as shown by horizontal labourelastic, as shown by horizontal labour supply curve WS.supply curve WS. Given a fixed supply of capital, K1, inGiven a fixed supply of capital, K1, in the initial stage of modern sectorthe initial stage of modern sector growth.growth.
- 13. The Lewis ModelTheLewis Model OL1=total modern sector employmentOL1=total modern sector employment OD1FL1=total modern sector outputOD1FL1=total modern sector output The surplus output shown by the areaThe surplus output shown by the area WD1F=total profitWD1F=total profit It is assumed that all these profits areIt is assumed that all these profits are reinvested.reinvested. The total capital stock in the modern sector willThe total capital stock in the modern sector will rise from K1 to K2,rise from K1 to K2, causing total product curve of the moderncausing total product curve of the modern sector to rise,sector to rise, hence induces a rise in the demand for labour.hence induces a rise in the demand for labour.
- 14. Strength of themodelStrength of the model The model is analytically strongThe model is analytically strong especially in describing two majorespecially in describing two major elements of the employment problem:elements of the employment problem: The structural and economicThe structural and economic differences between the rural and thedifferences between the rural and the urban sectorsurban sectors The central importance of the process ofThe central importance of the process of labour transfer between rural andlabour transfer between rural and urban sectorsurban sectors
- 15. weaknesses of themodelweaknesses of the model The model fail to explain theThe model fail to explain the underdevelopment in third worldunderdevelopment in third world countries in three aspects:countries in three aspects: 1: the model assumes that,1: the model assumes that, the rate of labour transfer andthe rate of labour transfer and employment creation is proportional toemployment creation is proportional to the rate of capital accumulation,the rate of capital accumulation, the faster the rate of capitalthe faster the rate of capital accumulation, the higher the growthaccumulation, the higher the growth rate of the modern sector and the fasterrate of the modern sector and the faster the rate of job creation.the rate of job creation.
- 16. weaknesses of themodelweaknesses of the model Although total GNP would rise,Although total GNP would rise, all the extra income and output growthall the extra income and output growth is distributed to the few owners ofis distributed to the few owners of capital whilecapital while income levels of the masses of workersincome levels of the masses of workers remain unchanged, hence noremain unchanged, hence no improvement in social welfareimprovement in social welfare
- 17. weaknesses of themodelweaknesses of the model 2:the model assumes that surplus labour2:the model assumes that surplus labour occurs in rural areas while there is fulloccurs in rural areas while there is full employment in urban areas,employment in urban areas, this is not with third world countries,this is not with third world countries, There is substantial openThere is substantial open unemployment in urban areas butunemployment in urban areas but almost no general surplus labour inalmost no general surplus labour in rural locations.rural locations.
- 18. weaknesses of themodelweaknesses of the model 3:3: the model assumes constant realthe model assumes constant real wages inwages in Urban areas,Urban areas, this however is not the case with thethis however is not the case with the developing countriesdeveloping countries where in most cases real wages bothwhere in most cases real wages both in absolute and relative terms tend toin absolute and relative terms tend to rise.rise.
- 19. An “expected income”modelAn “expected income” model
- 20. Major features ofthe modelMajor features of the model Migration process is affected by:Migration process is affected by: Social factorsSocial factors desire of migrants to break away fromdesire of migrants to break away from traditional constraints of socialtraditional constraints of social organizationorganization Physical factorsPhysical factors climate, floods, droughts, fertile soilsclimate, floods, droughts, fertile soils Demographic factorsDemographic factors reduction in mortality rates, higher ratereduction in mortality rates, higher rate of rural popn. growthof rural popn. growth
- 21. Major features ofthe modelMajor features of the model Cultural factorsCultural factors Security of the urban extended familySecurity of the urban extended family Communication factorsCommunication factors Improved transportation, urban-orientedImproved transportation, urban-oriented education systemeducation system Factors that discourage people to stay atFactors that discourage people to stay at the place of origin are “push factors” (-ves)the place of origin are “push factors” (-ves) Factors that encourage people to move toFactors that encourage people to move to the place of destination are “pull factors”the place of destination are “pull factors” (+ves)(+ves)
- 22. Major assumption ofthe modelMajor assumption of the model 1:The model assumes that,1:The model assumes that, People move from rural to urban asPeople move from rural to urban as result of expected rather than actualresult of expected rather than actual earningsearnings Expected earnings rural urban
- 23. Major assumption ofthe modelMajor assumption of the model 2:2: men migrate more than womenmen migrate more than women 3: Younger people migrate more than older3: Younger people migrate more than older ones, age of 15-24yrsones, age of 15-24yrs 4: most people migrate from small to large4: most people migrate from small to large town centerstown centers 5: most people migrate in shorter distances5: most people migrate in shorter distances 6: more educated people migrate more than6: more educated people migrate more than less educated peopleless educated people 7: those people who are economically well7: those people who are economically well migrate less than poor peoplemigrate less than poor people
- 24. Major assumption ofthe modelMajor assumption of the model 8:8: cost of migration may also influence acost of migration may also influence a decision to migratedecision to migrate 9: information flows also influence a9: information flows also influence a decision to migratedecision to migrate 10: government policies like taxes may10: government policies like taxes may also influence people to migratealso influence people to migrate
- 25.