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Title
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Social influence, agent heterogeneity and the emergence of the urban informal sector
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Author
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Abstract
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| We develop an agent-based computational model in which the urban informal sector acts as a buffer where rural migrants can earn some income while queuing for higher paying modern-sector jobs. In the model, the informal sector emerges as a result of rural-urban migration decisions of heterogeneous agents subject to social influence in the form of neighboring effects of varying strengths. Besides using a multinomial logit choice model that allows for agent idiosyncrasy, explicit agent heterogeneity is introduced in the form of socio-demographic characteristics preferred by modern-sector employers. We find that different combinations of the strength of social influence and the socio-economic composition of the workforce lead to very different urbanization and urban informal sector shares. In particular, moderate levels of social influence and a large proportion of rural inhabitants with preferred socio-demographic characteristics are conducive to a higher urbanization rate and a larger informal sector. (C) 2011 Elsevier B.V. All rights reserved. |
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Language
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English
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Source (journal)
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Physica: A : theoretical and statistical physics. - Amsterdam, 1975, currens
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Publication
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Amsterdam
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North-Holland
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2012
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ISSN
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0378-4371
[print]
1873-2119
[online]
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DOI
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10.1016/J.PHYSA.2011.08.057
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Volume/pages
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391
:4
(2012)
, p. 1563-1574
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ISI
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000300459700063
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Full text (Publisher's DOI)
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Full text (publisher's version - intranet only)
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