1. Rural-urban Migration and Poverty in Kenya: is Agriculture the Answer?
Maria Sassi
The aim of my presentation is the understanding of the impact of rural-urban migration on economic development and poverty in Kenya and the role ot technical efficiency change in agriculture.

2. Importance of the topic
Rural-urban
migration
Sub-Saharan
Africa
Social, economic,
political problems
of major significance
Rural-urban migration is of particular concern in Developing countries and particularly in SSA where the migration of hundreds of millions of rural people to cities in these chiefly agrarian countries is creating the social, economic and political problems of major significance.
For many years the economic development literature has viewed rural-urban migration favourably, but today, it is also recognised that the phenomenon should go with suitable policy intervention in rural areas.
Agrarian
countries

3. Theoretical literature (1/2)
Dual economy
Models
(1950s-1960s)
Todarian
Frameworks
(1970s-1980s)
New Economics
of Labour
Migration
(form 1990s)
The theoretical debate and its consequence policy recommendations can be articulated in three types of contributions. Those referred to:

4. New Economics of Labour Migration (2/2)
Remittances allocation
in rural areas
Internal migration
and
rural development
Rural development
policies for non migrant
MIGRATION POLICY GOAL
Accommodate migration
flows while preventing
the widening of rural
and urban imbalaces
Agricultural
policies

5. Focus of the analysis - Rural migrant: 70% of urban labour force;
Specific policy interventions;
Poverty: 54% & 80% in rural areas.
Kenya
The “growth sector” (24% GDP,
53% exports; 62% labour force);
-Increase in productivity.
Agriculture
My analysis wants to contribute to this debate ad it focuses on:
Kenya that provides a natural experiment to study rural-urban migration because rural migrants constitute a significant proportion of urban labour force, about 70%. And over time the phenomenon has been object of specific policy interventions mainly of Todarian nature: migration flows restrictions and urban wage subsidies. More recently, with the Poverty reduction strategy paper and the commitment of the country on the MDGs there has been a change of focus: agriculture is seen as the “growth sector” and it has been underlined the need for specific policies particularly aimed at increasing agricultural productivity.
- CGE approach: the change of focus in theoretical literature support the shift from partial approaches for the analysis of rural urban migration policies the general equilibrium approaches able to understand how a set of policies affects income, outuput and employment in both urban and urban areas and sectors simultaneously.
The CGE multisector model I have developed for Kenya accommodate the 2003 SAM elaborated in 2006 by Kiringai, Thurlow, Wanjale that I have duly reviewed according to the aim of the analysis;
The IAKE-CGE model works simulation the interaction of various economic actors across markets as specified in the neoclasical GE theory.
Impact of migration policies
on income, output & employment
in both urban and rural areas &
sectors SIMULTANEOUSLY
CGE approach
2003 SAM

6. 10% rural skilled to urban skilled
Simulations
10% rural skilled to urban skilled
Rural-urban
migration
10% rural semiskilled to urban semiskilled
10% rural unskilled to urban unskilled
10% increase in efficiency of agricultural production function
I have simulated two typologies of external shocks:
The former refers to rural-urban migration;
The latter technical efficiency change in agriculture.
Technical
efficiency change
50% increase in input specific efficiency of agricultural production function (agricultural, food industry, other industry and service inputs)

7. Rural - urban migration
No significant impact

8. Households by expenditure decile
10% rural migration:
Impact on income
(% change) -
Households by expenditure decile
(1=low; 10=high)

9. Technical efficiency change
10% increase in efficiency of
agricultural production function

10. Impact on income - current prices (%)
10% increase in efficiency of agricultural production function:
Impact on income and consumption (% change) -
Households by expenditure decile
(1=low; 10=high)
Impact on consumption - constant prices (%)

11. 10% increase in efficiency of agricultural production function
Impact on gross product at factor costs (% change)
Impact on rural labour
Current prices (%)
Wages (price index 1= base year)

12. 10% increase in efficiency of agricultural production function
Impact on macroeconomic indicators (% change)

13. 10% increase in efficiency of agricultural production function
Impact on domestic production and exports (% change)

14. Technical efficiency change
50% increase in input specific
efficiency of agricultural
production function

15. Impact on income (% change) Households by expenditure decile
(1=low; 10=high)

16. Agricultural inputs
Food industry inputs
Industry other inputs
Service inputs

17. Impact on macroeconomic indicators - current prices (% change)

18. Impact on gross product at factor costs - current prices (% change)

19. Conclusions

20. Conclusioni Attivazione processo di crescita complessivo
Importanza del progresso tecnico
Redditi delle famiglie agricole crescono meno di quelli delle non agricole
Miglioramento del benessere delle famiglie
Aumento delle diseguaglianze
Problema del debito pubblico e del sostegno deficit della bilancia dei pagamenti
Effetti depressivi del processo di
accumulazione che accompagna
il progresso tecnico
Effetti su tassi di interesse e inflazione

21. Theoretical literature (1/3)
Dual economy
models
- Initial stage of development;
- Intensive agricultural economy;
- Lack of capital & surplus of agricultural labour the needed manpower for industrialization.
Todarian
frameworks
New Economics
of labour
migration
Rural urban migration facilitation
to favour economic take-off

22. Theoretical literature (1/4)
- Understanding of the reasons of urban unemployment and its link with rural-urban migration
Dual economy
models
Todarian
frameworks
- Migration flows restrictions;
- Wage subsidies
Uniform wage subsidies
B-S; B
Urban wage subsidies
Compensations to rural areas
H-T
New Economics
of Labour
Migration
Job creation in rural areas & inequalities F.

23. Theoretical literature (1/5)
Support to R-U migration
Increasing efficiency in
job matches
Dual economy
models
- Who, when and how to migrate
Todarian
frameworks
- Internal migration and rural development
Remittancies;
Policies for rural
development.
New Economics
of Labour
Migration

24. Migration policies in Kenya
a. Colonial period
b. Post-colonial
period
Kenyatta presidency
( )
Moi presidency
( )
Kibaki presidency
(from 2002)