What is the expected return of migrating to the city

Assignment Help Econometrics

Reference no: EM13224711

Rural-Urban Migration

Consider the following variation of the basic Harris-Todaro Model. Assume that the going wage in agriculture is normalized at 1. The wage in the formal urban sector is 3. The wage in the informal sector is 0.5. Additionally, 20% of working adults who live in the city are employed in the formal sector. Also, assume that the discount rate is 10% and that the lifetime of an individual is only 2 periods. Consider the following situations: [4 points in total]

a) Upon migrating to the city, the individual could participate in a training program in period 1 that would take up all of their time, but would increase their chances of getting a job in the formal sector to 63%.

What is the expected return of migrating to the city?

Determine whether the individual should migrate to the city or not. Show the criteria used in making his decision.

Reference no: EM13224711

Questions Cloud

Compute the molality of the glycerol solution : An aqueous solution of glycerol C3H8O3 is 48% glycerol by mass. Calculate the molality of the glycerol solution

Discuss necessary conditions to make price discrimination : Discuss the necessary conditions to make price discrimination work and the best practices to use price discrimination to maximize profits while avoiding price wars. In your discussion make evident the challenges of the strategy

Define the balanced equation for the reaction : sodium borohydride reduction experiment write the balanced equation for the reaction and calculae the percent yield

What are the payments worth on the day to enter college : Your grandmother is gifting you $100 a month for four years while you attend college to earn your bachelor's degree. At a 5.5 percent discount rate, what are these payments worth to you on the day you enter college

What is the expected return of migrating to the city : Assume that the going wage in agriculture is normalized at 1. The wage in the formal urban sector is 3. The wage in the informal sector is 0.5. Additionally, 20% of working adults who live in the city are employed in the formal sector. Also, assum..

State sodium borohydride reduction : in a sodium borohydride reduction experiment explain any color changes observed when sodium borohydride was added.

Explain reaction order with respect to nitrogen monoxide : For the reaction of nitrogen monoxide, NO with chlorine, Cl2, 2NO(g) + Cl 2(g) -> 2NOCl(g) ; the observed rate law is : Rate = K[NO]^2 [Cl] What's the reaction order with respect to nitrogen monoxide? With respect to Cl2? What's the overall order?

Explain servant-leadership theory : Is Situational Leadership Model a useful model and how can we apply this model effectively and how is the servant-leadership theory different from transformational leadership?

How much will be able to pay annually for each of daughter : The difficulty of putting away money for their college educations precludes you from saving on a continuous basis for both. After reviewing your financial condition and projections, you think that the best you can do is to put away $2,500/year for..

User Account

All Pages