Question

Problem 2 What is the main difference in prediction between the Lewis model and the Harris-Todaro model on rural to urban migration? Given the validity of the Harris-Todaro model, what would you tell a government by creating government-subsidized jobs in its cities?

Answer 1

Lewis model explains that migrating from the traditional agricultural sector to a more profitable industrial sector , will create more economic growth. Thus economic development is progressive transformation of traditional into modern sector

Migration in Harris Todaro model is viewed as response to the significant wage gap that prevails between 'formal urban sector ' - that pays higher than normal wages to workers to get best quality workers, & agricultural sector.

Those who migrate to urban area & don't get join the formal sector, gets disguisedly unemployed in informal sector .

Thus H-Tmodel is all about motivations for migration , BUT more educated immigrants will be more tempted to migrate, and thus leading to excess migration causing URBAN unemployment.

Advice to government:

Thus will recommend government to use alternative policy to stop migration, restrictions should be imposed to stop immigration into cities

it would be counterproductive and create more unemployment due to excess migration from rural to urban areas.