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Migration magnet: the role of work experience in rural–urban wage differentials

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  • Maren Michaelsen
  • John Haisken-DeNew

Abstract

This study uses the nationally representative Mexican Family Life Survey (MxFLS) to identify systematic differences in earnings returns to human capital endowments for formal and informal sector workers in rural and urban Mexico. Returns to experience are critical in explaining the large urban wage gap in a Blinder-Oaxaca decomposition and indeed drive pull migration from the rural informal sector to the urban informal sector, exacerbating urban population congestion in already over-crowded main cities. Targeted rural industrial planning is essential to offset pull migration and ensure a more balanced urban/rural development through incentives. JEL classification: J24, J31, R23, Q15 Copyright Michaelsen and Haisken-DeNew. 2015

Suggested Citation

  • Maren Michaelsen & John Haisken-DeNew, 2015. "Migration magnet: the role of work experience in rural–urban wage differentials," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-25, December.
    • Handle: RePEc:spr:izamig:v:4:y:2015:i:1:p:1-25:10.1186/s40176-015-0046-7
    DOI: 10.1186/s40176-015-0046-7
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    More about this item

    Keywords

    Returns to experience; Rural–urban wage differentials; Formal/informal sector; Internal migration; Mexico;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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