Should I Stay or Should I Go? Selection on Migration and Learning in Cities in Brazil

The urbanization phenomenon is still going on, especially in developing countries, raising the question of why are cities this successful as productive centers. In this context, agglomeration economies in labor market outcomes have been explored significantly in the past years, even more because longitudinal individual micro-data were made available only recently in many countries. Most studies try to measure static agglomeration externalities, but more recently, there has been an increasing interest in dynamic agglomeration gains (which affect wage growth). Here we consider data for the Brazilian formal labor market from 1995 to 2008 (RAISMIGRA), trying to measure not only static agglomeration externalities, but also dynamic ones. In this sense, we try to understand how migratory movements affect the future wage level of individuals. We calculate the impact of acquired experience in different city sizes over the observed wage, finding that if individuals work more years in bigger cities, they will have higher wages in the future.