Essays in labor migration and economic development

This dissertation consists of four essays on the theme of labor migration. The first chapter is an introduction.;In the third chapter we present two instances where migration reinforces its own momentum. The first example introduces the notion of cost reducing migrant networks. Through ties of kinship and other social relationships, these networks link veteran with potential migrants and serve to reduce both the physical and psychological costs of migration as the stock of migrants accumulates. The findings suggest the possibility of multiple migration equilibrium and explain the selectivity in terms of migration sources and destinations--neither of which can be accounted for when migration decisions are based on simple cost-benefit calculations. We explore the public good property of migrant networks and the suboptimality of migration flows even when laborers are perfectly mobile across geographically isolated regions. The results also stress the causal relationship between the initial stock of migrants and the migration equilibrium which ensues. The second example presents a model of brain drain which incorporates the role of quality uncertainty of prospective migrant workers. Our analysis emphasizes the impact of scale economies of education and offer an alternative explanation to the cumulative causation of the brain drain phenomenon when the possibility of migration affects education decisions. Free movement of migrants across countries is always suboptimal from the source country's viewpoint and national income maximization calls for both an education as well as an emigration tax.;In the fourth chapter, we analyze the relationship between inequality in the distribution of productive assets and the propensity to migrate, in the context of an agriculturally oriented economy. We single out moral hazard on the part of hired laborers and credit market imperfection as key factors determining individual migration propensities. The findings identify the link between income inequality and the differential propensity to migrate between the haves and have nots. Ceteris paribus, a more unequal distribution of wealth implies a higher level of outmigration. The analysis also singles out redistribution of wealth originating from the rural sector itself as an avenue for alleviating the problem of excessive rural-urban migration.;The fifth chapter, investigates the evolution of migration pattern when information pertaining to sectoral employment probabilities is imperfect. The chapter focuses on the interplay between belief on employment probabilities across sectors and the pattern of migration. A privately optimal migration rule is characterized and accordingly, the pattern of aggregate migration over time is traced out. We identify the long run pattern of migration under various institutional settings. We find that many common intuitions such as "temporary policies can only have temporary effects on migration flows", "the poorest regions are the most migration prone areas" and "bilateral migration cannot be an equilibrium phenomenon" turn out to be suspect.;The second chapter examines a two-country general equilibrium trade model where transnational migrants find employment in the urban informal sector in the most country. We discuss the conditions under which such conventional concepts as "labor exports in underemployed economies improves welfare" do not necessarily hold. The asymmetric pattern of employment across migrants and domestic workers in turn distinguishes the welfare consequences of domestic population growth and foreign labor inflow. The presence of international labor mobility also renders ineffective several traditional corrective policy prescriptions against urban unemployment (such as unemployment tax (benefits) and foreign investment).