Internal migration in Algeria, 1966-1977: An empirical analysis

Average wage rates show a persistent differential between rural and urban areas of developing economies. Neoclassical theory predicts that migration of labor eventually would eliminate any wage differential across regions. However, the wage differential has persisted despite massive in-migration to urban regions.;A satisfactory explanation for this paradox has been elusive, especially in formal models. For example, the Harris-Todaro model contains an unexplained exogenous wage differential.;In the process of investigating patterns of inter-regional migration in Algeria (1966-77), this dissertation explains the paradox and casts light on the complex relationships among wages, unemployment, migration, education, and technical change.;Rural-urban polarization is associated with an asymmetric impact of technical progress on agriculture and manufacturing. As technical progress occurs, agriculture's share of GNP declines while the share of manufacturing increases (Engel's law), so that agricultural jobs tend to be eliminated even as manufacturing expansion provides jobs. And, new commercial enterprises tend to locate in urban clusters, in order to enjoy the external benefits from existing commercial infrastructures.;Therefore jobs are created more frequently in expanding urban regions than in rural regions. New jobs are increasingly technically sophisticated, and educated workers are in demand to fill them. The educated workers earn relatively higher wages, and the consequence is a higher average wage in urban regions.;Multiple regression analysis (tobit analysis and ordinary least squares) was performed on data for migrations to and from thirty-one regional districts in Algeria. The results were consistent with the theoretical analysis. Also, population redistribution occurred primarily because in-migration was deterred from impoverished regions; not because all migrations were rural-urban in nature. Many migrants were of urban origin.;Data published by the Algerian government showed that rates of rural unemployment were higher than rates of urban unemployment. Accordingly, the Harris-Todaro model of urban unemployment was rejected in favor of the earlier "surplus labor" model associated with the writings of W. Arthur Lewis.