Rural-urban migration has both positive and negative effects on the economy. While it initially withdrew surplus rural labor to provide labor for urban sectors, economists later realized that rural-urban migration rates often exceeded urban job creation rates, leading to higher urban unemployment. According to the 2001 Indian census, rural-urban migration was 20.5 million people. This disproportionately increases the urban job seeking population compared to overall urban population growth, putting pressure on the labor force. It also makes urban job creation more difficult due to rising wages and employee benefits. Both the short and long term effects are an imbalance of resources and rising surplus urban labor. The Harris-Todaro model explains how migration is stimulated by rational considerations of relative costs and benefits
2. Introduction In 1950s, rural-urban migration was considered good for the economy as surplus labor was withdrawn from rural sector to provide labor to urban sector. In 1960s economists realized : rural-urban migration > urban job creation rate => higher urban unemployment problem According to 2001 census, rural to urban migration in India was 20.5 million.
5. Conclusion Migration is stimulated by rational economic considerations of relative benefits and costs. The decision to migrate depends on expected rather than actual urban-rural wage differentials. The probability of obtaining an urban job is directly related to urban employment rate. High rates in excess of urban job opportunity growth rates are possible and likely. This is due to imbalance of economic opportunities between urban and rural areas in most developing countries.
