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Internal Migration and Urban Wages in Brazil: 1980-2000

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  • Tiago Freire

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Abstract

It is generally accepted that migration will lead to an increase in income. However the question is how will income be distributed across individuals in society? If migrants have lower education levels, when compared to current urban workers, then the in ow of migrants will increase the skill wage gap in urban areas. Previous work on this topic has focused on international migration in developed countries. To the best of our knowledge this is the rst study to look at the impact of rural-urban migration on city wages. Our results contribute to the evaluation of regional policies, as recent research has found that regional policies can lead to an increase (or decrease) in the number of rural to urban migrants. We use data the Brazilian Census for 1980 to 2000 to estimate the elasticity of substitution between high and low skill workers. We instrument for the change in the ratio of high to low skill workers, with rural-urban migrants (driven by rainfall shocks in rural areas). Finally, in our simulations we show that migration can only explain 3% of the decrease in the wage gap between high and low skill workers, in Brazil, between 1991 and 2000.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p384.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa11p384

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  1. George J. Borjas, 2006. "Native Internal Migration and the Labor Market Impact of Immigration," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
  2. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  3. Daniel da Mata & Uwe Deichmann & J. Vernon Henderson & Somik V. Lall & Hyoung G. Wang, 2005. "Determinants of City Growth in Brazil," Discussion Papers 1112, Instituto de Pesquisa Econômica Aplicada - IPEA.
  4. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
  5. Giovanni Peri, 2007. "Immigrants' Complementarities and Native Wages: Evidence from California," NBER Working Papers 12956, National Bureau of Economic Research, Inc.
  6. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers 2767, C.E.P.R. Discussion Papers.
  7. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
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