The incentive for rural to urban migration: a re-examination of the Harris-Todaro model

An attempt is made to provide a more accurate measure of the incentive for rural to urban migration in developing countries. The study uses data from Kenya to estimate the urban to rural wage gap and then decomposes the gap into the portion due to differences in explained characteristics of rural non-migrant workers and migrant urban workers, and the portion due to returns to observed attributes. The results suggest that the returns to observable attributes constitute the largest portion of the wage gap, and may offer a more accurate measure of the incentive for rural to urban migration.