An Agent-Based Implementation of the Todaro Model

The problem of internal migration and its effect on urban unemployment and underemployment has been the subject of an abundant theoretical literature on economic development. However, most discussions have been largely qualitative and have not provided enough rigorous frameworks with which to analyze the mechanism of labor migration and urban unemployment. In this paper, we build up an economic behavioral model of rural-urban migration which is an agent-based version of the analytical Todaro model described by deterministic ordinary differential equations. The agent-based model allows to explore the rural-urban labor migration process and give quantitative results on the equilibrium proportion of the labor force that is not absorbed by the modern industrial economy.