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Hillel Rapoport
 
''Migration, credit constraints and self-employment: A simple model of occupational choice, inequality and growth''
( 2002, Vol. 15 No.7 )
 
 
In this note we offer a simplification of Mesnard (2001) who extended Banerjee and Newman (1993) for migration. In doing so, we obtain a simple model of occupational choice, inequality and growth, where liquidity constraints determine not only access to entrepreneurship but also access to migration. Starting from an initial underdevelopment trap, we explore the conditions under which migration prospects allow for a shift towards the efficient long-run equilibrium of the economy. This complements the empirical literature on return migration and self-employment in highlighting the mechanisms whereby, in alleviating liquidity constraints for some households, migration and remittances may have significant aggregated effects.
 
 
Keywords:
JEL: O1 - Economic Development: General
F2 - International Factor Movements and International Business: General
 
Manuscript Received : Aug 22 2002 Manuscript Accepted : Oct 16 2002

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