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Agglomeration, Pollution, and Migration: A Substantial Link, and Policy Design

In: World Scientific Handbook of Global Migration, Volume 3: Types of Migrants and Economies: A Global Perspective

Author

Listed:
  • Stark, Oded
  • Pang, Yu
  • Fan, Simon

Abstract

We study a developing countries setting in which agglomeration efficiency of urban production attracts rural-to-urban migration, whereas urban pollution deters rural-to-urban migration. By means of a general equilibrium model we study the formation of policies aimed at striking a socially optimal balance between supporting efficient levels of urban agglomeration and mitigating urban pollution in the presence of endogenous rural-to-urban migration. We show that without government intervention, although rural-to-urban migration contributes to agglomeration economies, it does not improve social welfare because it also exacerbates environmental degradation. We also show that urban pollution problems cannot be resolved by means of environmental regulation alone: for example, an emissions tax aimed at curbing urban pollution can backfire as and when it increases the appeal of rural-to-urban migration. A policy of emissions tax in conjunction with a subsidy to rural individuals is an effective means of enhancing urban productivity while reducing urban pollution.

Suggested Citation

  • Stark, Oded & Pang, Yu & Fan, Simon, 2024. "Agglomeration, Pollution, and Migration: A Substantial Link, and Policy Design," EconStor Open Access Book Chapters, in: World Scientific Handbook of Global Migration, Volume 3: Types of Migrants and Economies: A Global Perspective, pages 199-225, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:eschap:297286
    DOI: 10.1142/9789811248146_0009
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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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