PRESCRIPTIVE LABOUR MIGRATION, NATIONAL SAVINGS DETERMINATION AND INCOME CONSUMPTION RATIONALITY FUNCTION

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Published: 2022-12-31

DOI: 10.56557/jet/2022/v7i28116

Page: 53-61


STANLEY K. KIRIKA *

Department of Accounting and Finance, Technical University of Kenya, Kenya.

*Author to whom correspondence should be addressed.


Abstract

Profit plough back and savings for investment underpin the economic growth of businesses and individuals. When the economy is not doing well, prompted by calamities like Covid-19 or occasioned by ordinary life cycles, individuals seek to migrate seeking job opportunities that pay better, enabling them to save for investment, eventually increasing welfare. Economic entities left at home continue to look for ways of mobilizing savings for growth. This article proposes analytic solutions to the labour migration and national savings problem by determining activation rationality pay-off, the labour migration rationality threshold and computing national savings using the income consumption rationality function deriving from the entropy rationality model – a behavioural framework that determines economic rationality exercised by an economic agent on a percentage scale. It is hoped that the proposed analytic solutions will be found useful by especially labour migrants and labour policymakers in this exponentially global growing society.

Keywords: Income consumption rationality function, activation rationality, activation rationality savings trade-off, labour migration remuneration threshold, cogni-economic pressure


How to Cite

KIRIKA, S. K. (2022). PRESCRIPTIVE LABOUR MIGRATION, NATIONAL SAVINGS DETERMINATION AND INCOME CONSUMPTION RATIONALITY FUNCTION. Journal of Economics and Trade, 7(2), 53–61. https://doi.org/10.56557/jet/2022/v7i28116

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