Review Questions

1.
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Outline the main factors governing a worker's decision to move from one location to another. Why is migration viewed as an investment in human capital?
2.
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Suppose that a researcher collects data on the earnings of individuals before and after they migrate. If he or she finds that 40% of the migrants experience a decline in earnings, does this imply that migration is irrational?
3.
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Under what circumstances might an increase in the earnings risks associated with migration increase the likelihood of migration?
4.
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Explain why unemployment typically arises in the Harris-Todaro model and why the resulting equilibrium tends to be inefficient.
5.
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What is meant by spatial mismatch and what policies might be used to tackle the problem?

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