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Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia

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  • Samuel Bazzi
  • Arya Gaduh
  • Alexander D. Rothenberg
  • Maisy Wong

Abstract

We use a natural experiment in Indonesia to provide causal evidence on the role of location-specific human capital and skill transferability in shaping the spatial distribution of productivity. From 1979-1988, the Transmigration Program relocated two million migrants from rural Java and Bali to new rural settlements in the Outer Islands. Villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later. We find some evidence of migrants' adaptation to agroclimatic change. Overall, our results suggest that regional productivity differences may overstate the potential gains from migration.

Suggested Citation

  • 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.
    • Handle: RePEc:aea:aecrev:v:106:y:2016:i:9:p:2658-98
    Note: DOI: 10.1257/aer.20141781
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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    1. Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia (AER 2016) in ReplicationWiki

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