ABSTRACT
This chapter reviews a sample of the literature on urban and rural economics, proceeding from aggregative studies to microlevel research. It describes the scale of rural-to-urban migration in developing countries and considers the hypothesis of overurbanization. The chapter looks at urban labor markets and how the process of migration is shaped by labor market segmentation in the urban economy. Labor market conditions are only partly expressed through wage or income levels. Migration is a response of individuals to better opportunities. Considerable evidence suggests that private gains from migration are substantial. The determinants of rural-to-urban migration can be approached through either a micro- or a macromigration function. Population size in both origin and a destination area is assumed in the gravity model to be another important determinant of migration. As for the role of income variables in explaining gross migration flows, the influence of the destination wage on the rate of migration is generally significant and quantitatively quite substantial.
