1. Labor Migration: Micheal Todaro
A look at Rural - Urban Migration in terms of theory and policy

2. Micheal Todaro

3. The Urban Informal Sector
Unregulated, unorganized
Self-employed:street vending, knife sharpening, prostitution, drug peddling
Noticed in the 1970’s because of massive additions to the urban labor force failed to show in the modern sector unemployment statistics.

4. Characteristics of Informal
Small scale production
Service activities that are family owned
Labor-intensive and simple technology
Tend to work to survive rather than for profit
Informal sector is a holding ground for people awaiting entry into formal sector

5. Promoting the informal sector
Informal sector generates surplus even under the currently hostile policy environment
Result of its low capital intensity, only a only a fraction of the capital needed in the formal sector is required to employ a worker in the informal sector

6. Continuing...
By providing access to training and apprenticeships at substantially lower costs than the formal sector the informal sector can create human capital
Informal sector generates demand for the unskilled which are turned away from the formal sector

7. Once more...
Informal sector is likely to adopt appropriate technologies and make use of local resources, allowing more efficient allocation of resources
Promotion of the informal sector would ensure increased benefits or development to the poor

8. Disadvantages of the Informal Sector
Labor absorption in the informal sector
Pollution
Lack of Capital is a major constraint on activities in the informal sector

9. Migration into Urban Areas -- Supply Side
Increases growth rate of urban job seekers relative to urban population growth
The presence of well-educated young people swell the growth of urban labor supply while depleting the rural countryside of valuable human capital

10. Migration into Urban Areas -- Demand side
Rising urban wages and compulsory employee fringe benefits in combination with the unavailability of more labor intensive production technologies means a rising share of modern sector output growth accounted for by increase in labor productivity-supply increases-and demand lags creating labor demand shortages

11. Migrant Characteristics
Demographic - young men and women between ages of 15 and 24
Educational - recent studies have found that the more educated the more likely to migrate
Economic - poor, landless, and unskilled to educated, skilled