Market inefficiencies in the equalization of regional unemployment rate differentials in less-developed countries

The efficiency of the migration process as a market mechanism to equalize regional unemployment rate differentials in less developed countries has been the main aim of this thesis. First, we develop a dynamic model which allows us to describe the worker migration decision under different employment statuses. Two special characteristics are introduced in the model: the lack of access to credit by unemployed workers and the level of assets that the workers have at the decision making time. These two factors are very important in the determination of migration, and they are especially important in LDCs, where a high proportion of the population is living at or below poverty levels.