Dr. Gogol Mitra Thakur (JNU) will be presenting a seminar today (7th April 2017) at 3.30 P.M. in Seminar Room No.1.
Title: Petty Services, Profit-Led Growth and Rural-Urban Migration in a Developing Economy
Abstract: This paper argues that a high growth in the formal sector can not only lead to an abundance of petty services in urban areas of developing economies by inducing rural-urban migration, as one may expect from Harris and Todaro (1970), but an abundance of petty services can also lead to high growth in the formal sector. If self-employment in these services form the opportunity cost of formal sector work then low prices of these services should depress wage in the formal sector. In case growth in the urban formal sector is profit-led, then a low product wage means a high rate of growth in the sector. A high growth rate of output means a high rate of employment generation in the urban formal sector which increases the rate of rural-urban migration. To the extent this increases supply and lowers prices of petty services, the entire process becomes self-sustaining. Moreover any exogenous factor, such as a deterioration in rural infrastructure, that increases the rate of rural-urban migration can provide further impetus to this process.