Revising the Harris-Todaro framework to model labour migration from the Canadian Northern frontier

Abstract

The Harris-Todaro model of labour migration was developed almost four decades ago, and since has become a classic method of migration analysis in less developed countries. This paper explores the applicability of the Harris-Todaro (HT) framework outside its traditional use, by modelling frontier-metropolis migration in Canada. If appropriate, the framework can potentially be used in other countries with similar regional dichotomies, such as Russia and Australia. The paper argues that the HT model is generally applicable in the context of migration from the resource frontier to large metropolitan areas of the Canadian south, although it requires several modifications. The classic HT model is extended to account for northern labour-force heterogeneity (Aboriginal and Non-Aboriginal), the possibility of having or losing jobs in the declining and undiversified frontier economy, and living cost differentials. Further analysis is focused on Aboriginal migration from isolated northern communities. The plausibility of the modified HT model is demonstrated using an empirical test, in which the model is used to assess migration probabilities of Aboriginal labour migrants. These new insights into the mechanisms of frontier-metropolis migration could provide a better basis for developing planning strategies, aimed to sustain human capital in the Canadian North, and for optimizing welfare policies both in the North and in the South. Keywords: labour migration, frontier workers, Aboriginal population, economic models, Canadian NorthThe Harris-Todaro (HT) model initially proposed in Todaro (1969), and restated in Harris and Todaro (1970), became a classic framework for analysing migration and labour-market equilibrium. At the time, the model was very innovative if not revolutionary (Allen 2001). It demonstrated that, in a two-sector regional system, migration from underdeveloped (rural) to developed (urban) sectors will persist despite high unemployment in the latter, as long as there are sufficiently high expectations of finding a job and earning more. It was also argued that the creation of new jobs in the urban sector imminently leads to an increase in urban unemployment, a situation known as the 'Todaro paradox' (Raimondos 2003). 1 During the last three decades, the model has been significantly modified (e.g.

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