Theories Of The Neoclassical Theory Of Migration

Labor migration, as an important fact of economic and social life, could not stay behind attention of scientists and researchers. One of the first serious theoretical foundations of the labor movement should recall to the Neoclassical theory of migration. The basis of this concept, the formation at the forefront of international differences in wage levels. The founder of the theory is J. Hicks and his work "Theory of wages"[4]. He's one of the first scientists who has considered migration as a rational decision of the individual, who is able on the basis of full and accurate information assess their prospects in the most accurate way. Problems of unemployment and cost of moving was not taken into consideration. As an incentive to migration, …show more content…
And mechanism can be used in both: sending and receiving country. However, over the time it became clear that the neoclassical theory could not explain several important empirical factors. The main reason for the limited applicability of neoclassical theory is its premise, overly simplify reality. This realization was a good imput for new studies based on more narrow range of requirement. However, do not forget that under the neoclassical concept of migration for the first time migration was explains as an informed decision of the individual seeking to maximize their income. A significant attempt to correct the limitations of the neoclassical approach was the concept of the New Economics of Migration. It pays special attention on micro level and allows to take into consideration the response elements of the economy on rational expectations of the migrating population. In this theory, migration is seen as a family strategy aimed to minimize the risk of sharp fluctuations of income through diversification and to overcome the financial constraints of the production possibilities. In addition, stresses the importance of such factors as the income level of the family environment, making decisions of migration. The most important notices from this theory …show more content…
One of these factors, capable to provoke the movement of workers, is the level of income of others. For the first time this idea was considered by O. Stark. [9] All the people compare their income with the income of their environment - friends, colleagues, neighbors - their social group. A similar comparison operations can generate psychological costs or benefits, the feeling of satisfaction, or conversely dissatisfaction. In this case, migration plays the role of a tool to solve the problem of dissatisfaction with the social status - or move helps to occupy a higher position within a particular social group, or to change this group to a higher. And revenues are smaller in absolute value may be preferable, if not hinder the achievement of higher social status. Accordingly, the decision to migrate is accepted by most of those countries and those people who can observe the greatest level of income