Do Migrants React to Infrastructure Difference between Urban and Rural Areas?:Development and Application of an Extended Harris-Todaro Model

Developing an extended model of the basic Harris-Todaro model of rural-urban migration, we analyze the effects of infrastructure availability together with the time-tested income effects whilst accommodating government behaviour through the provision and financing of infrastructure. Both the theoretical and empirical analyses confirm the assertion that infrastructure presence can be a force to reckon with as far as migration decisions are concerned. Comparison with the basic Harris-Todaro model also reveals that while the Todaro paradox is absent in the basic model, it can be present in the extended model. Keywords: Rural-urban migration, Infrastructure effects, Income difference, Equilibrium utility, Todaro-paradox. JEL classification: O17, O18, R23