INTERNAL MIGRATION DECISIONS AND THEIR EFFECTS ON UNEMPLOYMENT AND WELFARE

The dissertation considers two problems in the context of internal migration in the developing countries.;It is shown that the family might stop sending more members to the urban sector even when there is an intersectoral wage difference or the family may send additional members to the other sector when the wage differential is zero or negative. This contradicts the decisions which an individual would have taken under the same circumstances. The above analysis provides an explanation for the phenomena of partial migration in the developing countries where the family sends some of its members to the urban sector and keeps the rest of it in the village while receiving some remittances back from the migrant relative in the urban sector. Data from India have been used to support the analysis.;The second problem considers individual decision about migration in a different context of a two sector, two good, two factor model where one of the sectors is facing minimum wage constraint. Two sectors are allowed to trade and there is no restriction on reverse migration. The direction of migration and its effect on output and employment corresponding to different trade-equilibrium points have been analyzed. It is found out that depending on the point of equilibrium on the urban sector's offer curve, migration may raise employment and welfare in the destination region or the min-wage region. Thus, it is possible for one region to pursue some policy (such as restricted trade) to offset the effect of market intervention by the imposition of min-wage. It is also seen how migration may reduce the original level of employment when the flow of migration is from min-wage sector with unemployment towards free region (i.e., non-minimum wage region). Finally, Harris-Todaro's unemployment equilibrium is reached in a special situation when minimum wage region is completely specialized but other region is incompletely specialized.;The first problem is on family decision about migration under the institution of family-farming. Factors motivating the migration decision of the family have been determined.