Consider the Harris-Todaro migration model applied to the United States; where average annual personal income is $41,000 in Jackson, MS, with 9.82% unemployment rate; and $63,800 in Chicago, with a 6.24% unemployment rate. Applying these data, please answer the following questions:
(1) Explain why annual income is higher in Chicago than Jackson.
(2) Explain why unemployment rate is lower in Chicago than Jackson.
(3) What is the probability that an individual would find employment in Chicago?
(4) What is the probability that an individual would find employment in Jackson?
(5) Calculate a potential migrant’s Expected Earnings (dollar amount) in Jackson.
(6) Calculate a potential migrant’s Expected Earnings (dollar amount) in Chicago.
(7) What would be the Expected Earnings differential between the two cities in this model?
(8) Between Jackson and Chicago, which city would exhibit migration pull-factors? Explain.
(9) Between Jackson and Chicago, which city would exhibit migration push-factors? Explain.
(10) Based on this Harris-Todaro model, explain why or why not, a College graduate in Jackson might decide to move to Chicago.
