Optimization of Rural-Urban Development and Migration

The paper deals with rural-urban migration and the impact of migration on regional development. In order to derive the optimal migration strategy, the general problem of optimal allocation of production factors in time and space is introduced. Describing the regional economy by a generalized Cobb-Douglas production function, the general problem is decomposed into two levels. Using the generalized Hölder inequality at the first level, optimal allocation of factors in time is solved in an explicit form. At the second level, a spatial strategy is derived and the principle of spatial allocation of production factors is formulated. Using the optimal strategies, the simple two-sector (i.e., agriculture and the rest of the economy) model was investigated and the labor surpluses in Polish agriculture and in an agricultural region in Poland were calculate