Editing Harris–Todaro model (section)

==Formalism==
The formal statement of the equilibrium condition of the Harris–Todaro model is as follows:<ref>{{cite book |last=Ray |first=Debraj |date=1998 |title=Development Economics |url=https://books.google.com/books?id=RWC4AAAAIAAJ |publisher=Princeton University Press |page=372|isbn=9780691017068 }}</ref>
*Let <math>\ w_A </math> be the wage rate (marginal productivity of labor) in the rural agricultural sector.
*Let <math>\ L_F </math> be the total number of jobs available in the formal urban sector.
*Let <math>\ L_I </math> be the total number of jobs available in the informal urban sector.
*Let <math>\ w_F </math> be the wage rate in the formal urban sector, which could possibly be set by government with a minimum wage law.
*Let <math>\ w_I </math> be the wage rate in the informal urban sector.

Rural to urban migration will take place if:
:<math>\ w_A < \frac{L_F}{L_F+L_I} w_F + \frac{L_I}{{L_F}+{L_I}} w_I </math>

Conversely, urban to rural migration will occur if:
:<math>\ w_A > \frac{L_F}{L_F+L_I} w_F + \frac{L_I}{{L_F}+{L_I}} w_I </math>

At equilibrium, 
:<math>\ w_A = \frac{L_F}{L_F+L_I} w_F + \frac{L_I}{{L_F}+{L_I}} w_I </math>

With the random matching of workers to available jobs, the ratio of available jobs to total job seekers gives the probability that any person moving from the agricultural sector to the urban sector will be able to find a job. As a result, in equilibrium, the agricultural wage rate is equal to the expected urban wage rate, which is the urban wage multiplied by the employment rate.