IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/23540.html
   My bibliography  Save this paper

The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia

Author

Listed:
  • Gharad Bryan
  • Melanie Morten

Abstract

We estimate the aggregate productivity gains from reducing barriers to internal labor migration in Indonesia, accounting for worker selection and spatial differences in human capital. We distinguish between movement costs, which mean workers will only move if they expect higher wages, and amenity differences, which mean some locations must pay more to attract workers. We find modest but important aggregate impacts. We estimate a 22% increase in labor productivity from removing all barriers. Reducing migration costs to the US level, a high mobility benchmark, leads to an 8% productivity boost. These figures hides substantial heterogeneity. The origin population that benefits most sees an 104% increase in average earnings from a complete barrier removal, or a 37% increase from moving to the US benchmark.

Suggested Citation

  • Gharad Bryan & Melanie Morten, 2017. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," NBER Working Papers 23540, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23540
    Note: DEV
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w23540.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    2. Caselli, Francesco, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 5266, London School of Economics and Political Science, LSE Library.
    3. Samuel Bazzi & Arya Gaduh & Alexander D. Rothenberg & Maisy Wong, 2016. "Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia," American Economic Review, American Economic Association, vol. 106(9), pages 2658-2698, September.
    4. Melanie Morten, 2016. "Temporary Migration and Endogenous Risk Sharing in Village India," NBER Working Papers 22159, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    2. Benoît Schmutz & Modibo Sidibé, 2019. "Frictional Labour Mobility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(4), pages 1779-1826.
    3. Sebastian Heise & Tommaso Porzio, 2019. "Spatial Wage Gaps in Frictional Labor Markets," Opportunity and Inclusive Growth Institute Working Papers 29, Federal Reserve Bank of Minneapolis.
    4. Agha Ali Akram & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2017. "Effects of Emigration on Rural Labor Markets," NBER Working Papers 23929, National Bureau of Economic Research, Inc.
    5. Xu, Shang & Klaiber, Allen & Miteva, Daniela, 2018. "The Impact of Concessions on Household Location Choice and Well-Being in Indonesia," 2018 Annual Meeting, August 5-7, Washington, D.C. 274009, Agricultural and Applied Economics Association.
    6. Porzio, T. & Santangelo, G., 2019. "Does Schooling Cause Structural Transformation?," Cambridge Working Papers in Economics 1925, Faculty of Economics, University of Cambridge.
    7. Sebastian Heise & Tommaso Porzio, 2018. "The Invisible Border between East and West Germany," 2018 Meeting Papers 605, Society for Economic Dynamics.
    8. Imbert, Clément & Papp, John, 2020. "Costs and benefits of rural-urban migration: Evidence from India," Journal of Development Economics, Elsevier, vol. 146(C).
    9. Baysan, Ceren & Dar, Manzoor H. & Emerick, Kyle & Sadoulet, Elisabeth, 2019. "The agricultural wage gap within rural villages," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8kq8z35d, Department of Agricultural & Resource Economics, UC Berkeley.
    10. de Brauw, Alan, 2018. "Rural-urban migration and implications for rural production," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(3), March.
    11. Porzio, Tommaso & Santangelo, Gabriella, 2017. "Structural Change and the Supply of Agricultural Workers," CEPR Discussion Papers 12495, C.E.P.R. Discussion Papers.
    12. Zi, Yuan, 2020. "Trade Liberalization and the Great Labor Reallocation," CEPR Discussion Papers 14490, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gollin, Douglas & Lagakos, David & Kirchberger, Martina, 2017. "In Search of a Spatial Equilibrium in the Developing World," CEPR Discussion Papers 12114, C.E.P.R. Discussion Papers.
    2. Joan Hamory & Marieke Kleemans & Nicholas Y Li & Edward Miguel, 2021. "Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata," Journal of the European Economic Association, European Economic Association, vol. 19(3), pages 1522-1555.
    3. Albrecht Glitz & Erik Meyersson, 2020. "Industrial Espionage and Productivity," American Economic Review, American Economic Association, vol. 110(4), pages 1055-1103, April.
    4. De Magalhães, Leandro & Santaeulàlia-Llopis, Raül, 2018. "The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists," Journal of Development Economics, Elsevier, vol. 134(C), pages 350-371.
    5. Agha Ali Akram & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2017. "Effects of Emigration on Rural Labor Markets," NBER Working Papers 23929, National Bureau of Economic Research, Inc.
    6. Yashiv, Eran, 2020. "Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks," IZA Discussion Papers 13131, Institute of Labor Economics (IZA).
    7. Douglas Gollin & David Lagakos & Michael E. Waugh, 2014. "The Agricultural Productivity Gap," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 939-993.
    8. Lewis, Joshua & Severnini, Edson, 2020. "Short- and long-run impacts of rural electrification: Evidence from the historical rollout of the U.S. power grid," Journal of Development Economics, Elsevier, vol. 143(C).
    9. Kaivan Munshi & Mark Rosenzweig, 2016. "Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap," American Economic Review, American Economic Association, vol. 106(1), pages 46-98, January.
    10. Obolensky, Marguerite & Tabellini, Marco & Taylor, Charles A., 2024. "Homeward Bound: How Migrants Seek Out Familiar Climates," IZA Discussion Papers 16710, Institute of Labor Economics (IZA).
    11. Bryan, Gharad & Morten, Melanie, 2019. "The aggregate productivity effects of internal migration: evidence from Indonesia," LSE Research Online Documents on Economics 88177, London School of Economics and Political Science, LSE Library.
    12. Marguerite Obolensky & Marco Tabellini & Charles Taylor, 2024. "Homeward Bound: How Migrants Seek Out Familiar Climates," RF Berlin - CReAM Discussion Paper Series 2401, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    13. Tohari, Achmad & Parsons, Christopher & Rammohan, Anu, 2021. "Capital Fundamentalism and Structural Transformation," IZA Discussion Papers 14444, Institute of Labor Economics (IZA).
    14. Mike Waugh & Ahmed Mobarak & David Lagakos, 2016. "Urban-Rural Wage Gaps in Developing Countries: Spatial Misallocation or Efficient Sorting?," 2016 Meeting Papers 1032, Society for Economic Dynamics.
    15. Gabriele Ruiu & Giovanna Gonano, 2020. "Religious Barriers to the Diffusion of Same-sex Civil Unions in Italy," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(6), pages 1185-1203, December.
    16. Wright, Austin L. & Sonin, Konstantin & Driscoll, Jesse & Wilson, Jarnickae, 2020. "Poverty and economic dislocation reduce compliance with COVID-19 shelter-in-place protocols," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 544-554.
    17. Guido de Blasio & Daniela Vuri, 2019. "Effects of the Joint Custody Law in Italy," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 16(3), pages 479-514, September.
    18. Graves Jennifer & McMullen Steven & Rouse Kathryn, 2018. "Teacher Turnover, Composition and Qualifications in the Year-Round School Setting," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-27, July.
    19. Santos, João & Domingos, Tiago & Sousa, Tânia & St. Aubyn, Miguel, 2016. "Does a small cost share reflect a negligible role for energy in economic production? Testing for aggregate production functions including capital, labor, and useful exergy through a cointegration-base," MPRA Paper 70850, University Library of Munich, Germany.
    20. Alston Lee J. & Mueller Bernardo, 2018. "Priests, Conflicts and Property Rights: the Impacts on Tenancy and Land Use in Brazil," Man and the Economy, De Gruyter, vol. 5(1), pages 1-26, June.

    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23540. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.