| Abstract: | FLEXIBLE work-hours and surplus labour in agriculture are incorporatedinto the Harris-Todaro model. Migration equilibrium is characterizedby equality of expected welfare rather than expected incomein the two sectors. Increase in expected wage still causes outnugrationfrom agriculture, but if the commodity-price ratio is exogenous,outmigration occurs when minimum wage is raised even when expectedurban wage is constant. Moreover, migration flows are largerthan in a closed economy with fixed work-hours. Implicationsof these results for determining shadow wage rate of labourand designing economic policy are also discussed. |
