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Intersectoral size differences and migration: Kuznets revisited

conference contribution
posted on 2005-01-01, 00:00 authored by Nejat AnbarciNejat Anbarci, Mehmet UlubasogluMehmet Ulubasoglu
The empirical evidence on the Kuznets hypothesis ranges from positive or negative support to insignificant relationships. Most studies typically try this hypothesis in domains different than the one conceived by Kuznets, which pertains to the industrialization-led urbanization (i.e., significant rural-urban migration) phase of societies. In this paper, we offer a specific channel on Kuznets' hypothesis in his suggested domain. First, we establish theoretically that intersectoral urban-rural size differences result in an intersectoral income inequality, increasing the national inequality. This, in turn, prompts an intersectoral migration, which works as an equilibriating mechanism in the economy, decreasing the inequality in due course. We then successfully test the predictions of the model. The theoretical predictions yield a recursive triangular system, in which we test, i) how the sectoral size differences influence the agricultural income, ii) how a change in agricultural income acts on migration, and iii) what happens to the income distribution as a result of migration. We find a very strong support for the theoretical predictions and the Kuznets hypothesis in its own domain.

History

Event

Australian Conference of Economists (2005: Melbourne, Vic.)

Pagination

1 - 40

Publisher

University of Melbourne/Conference Maker

Location

Melbourne, Vic.

Place of publication

Melbourne, Vic.

Start date

2005-09-26

End date

2005-09-28

ISBN-13

9780734026088

ISBN-10

0734026080

Language

eng

Publication classification

E1 Full written paper - refereed

Editor/Contributor(s)

R Dixon

Title of proceedings

Proceedings of the Australian Conference of Economists

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