title: Labor migration and risk aversion in less developed countries.
abstract: "In this paper we question the pioneering work of Todaro, which states that rural-to-urban labor migration in less developed countries (LDCs) is an individual response to a higher urban expected income.  We demonstrate that rural-to-urban labor migration is perfectly rational even if urban expected income is lower than rural income.  We achieve this under a set of fairly stringent conditions:  an individual decision-making entity, a one-period planning horizon, and global risk aversion.  We obtain the result that a small chance of reaping a high reward is sufficient to trigger rural-to-urban labor migration."
authors.forename: E
authors.initials: E
authors.lastname: Katz
authors.forename: O
authors.initials: O
authors.lastname: Stark
mesh_terms: D001519:Behavior; D003657:Decision Making; D003710:Demography; D003906:Developing Countries; D004467:Economics; D004641:Emigration and Immigration; D004651:Employment; D005069:Evaluation Studies as Topic; D006280:Health Workforce; D007182:Income; D009042:Motivation; D011153:Population; D011157:Population Dynamics; D011336:Probability; D011584:Psychology; D012106:Research; D012959:Socioeconomic Factors; D013223:Statistics as Topic
keywords: Behavior; Critique; Decision Making; Demographic Factors; Developing Countries; Economic Factors; Human Resources; Income; Labor Force; Migration; Motivation; Population; Population Dynamics; Probability; Psychological Factors; Research Methodology; Rural-urban Migration; Socioeconomic Factors; Statistical Studies; Studies