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Wealth Heterogeneity and the Income Elasticity of Migration

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  • Samuel Bazzi

Abstract

How do income shocks affect international migration flows from poor countries? Income growth not only increases the opportunity cost of migration but also eases liquidity constraints. I develop a method to separate these countervailing individual effects and identify the overall income elasticity of migration. Using new administrative and census data from Indonesia, I find that positive agricultural income shocks increase labor emigration flows, particularly in villages with relatively more small landholders. However, in the most developed rural areas, persistent income shocks reduce emigration. Overall, the findings highlight the important role of wealth heterogeneity in shaping migration flows as incomes rise.

Suggested Citation

  • Samuel Bazzi, 2017. "Wealth Heterogeneity and the Income Elasticity of Migration," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 219-255, April.
  • Handle: RePEc:aea:aejapp:v:9:y:2017:i:2:p:219-55
    Note: DOI: 10.1257/app.20150548
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    Cited by:

    1. Mariapia, Mendola, 2018. "Global evidence on prospective migrants from developing countries," Working Papers 387, University of Milano-Bicocca, Department of Economics, revised 19 Sep 2018.
    2. repec:eee:wdevel:v:113:y:2019:i:c:p:186-203 is not listed on IDEAS
    3. Chiara Falco & Marzio Galeotti & Alessandro Olper, 2018. "Climate change and Migration: Is Agriculture the Main Channel?," IEFE Working Papers 100, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    4. Hamory Hicks, Joan & Kleemans, Marieke & Li, Nicholas & Miguel, Edward, 2017. "Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258015, Agricultural and Applied Economics Association.
    5. Eva-Maria Egger & Julie Litchfield, 2019. "Following in their footsteps: an analysis of the impact of successive migration on rural household welfare in Ghana," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-22, December.
    6. repec:eee:deveco:v:135:y:2018:i:c:p:488-503 is not listed on IDEAS
    7. Benonnier, Theo & Millock, Katrin & Taraz, Vis P., 2019. "Climate change, migration, and irrigation," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291028, Agricultural and Applied Economics Association.
    8. Rowena Gray & Gaia Narciso & Gaspare Tortorici, 2017. "Globalization, Agricultural Markets and Mass Migration," CReAM Discussion Paper Series 1713, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    9. Chen, Joyce & Kosec, Katrina & Mueller, Valerie, 2019. "Moving to despair? Migration and well-being in Pakistan," World Development, Elsevier, vol. 113(C), pages 186-203.
    10. Imbert, Clément & Papp, John, 2018. "Costs and Benefits of Seasonal Migration : Evidence from India," The Warwick Economics Research Paper Series (TWERPS) 1161, University of Warwick, Department of Economics.
    11. André Gröger, 2019. "Easy Come, Easy Go? Economic Shocks, Labor Migration and the Family Left Behind," Working Papers 1086, Barcelona Graduate School of Economics.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • 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
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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