Institute for Development Studies, University of Nairobi

In Developing Economies the level of urban wages tends to induce more people to seek employment in the towns than can be employed at this wage level. The existence of these urban unemployed causes the private costs of migration to diverge from the social costs. The individual rural resident decides to remain or migrate on the basis of perceived private costs of migration. The effect of a decision to migrate on the economy is the social cost of migration. In our study we consider the determinants of different levels of private and social costs associated with different stocks of urban unemployed. In addition, utilizing survey data on Nairobi, Kenya, an attempt is made to quantify, the major private and social costs of migration to determine whether they diverge significantly. On the basis of these estimates some policy options for limiting urban unemployment caused by urban in-migration are considered.