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Determinants of the Choice of Migration Destination

  • Fafchamps, Marcel
  • Shilpi, Forhad

This paper examines migrants' choice of destination conditional on migration. To this end, we design an empirical strategy which remedies both migration selection and unobserved heterogeneity problems. The study uses data from two rounds of Nepal Living Standard Surveys and a Population Census and examine how the choice of a migration destination is influenced by income differentials and other covariates. We find distance, population density, and social proximity to have a strong significant effect: migrants move primarily to proximate, high population density areas where many people share their language and ethnic background. Better access to amenities is significant as well. Differentials in average income across districts are significant in univariate comparisons but not once we control for other covariates. Differentials in consumption expenditures are statistically significant but smaller in magnitude than other determinants. It is differentials in absolute, not relative, consumption that seem to matter most to work migrants. Except for the latter, results are robust to different specifications and datasets.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7407.

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Date of creation: Aug 2009
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Handle: RePEc:cpr:ceprdp:7407
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  1. Gordon Dahl, 1997. "Mobility and the Returns to Education: Testing A Roy Model With Multiple Markets," Working Papers 760, Princeton University, Department of Economics, Industrial Relations Section..
  2. Lori A. Beaman, 2012. "Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 128-161.
  3. Marcel Fafchamps & Forhad Shilpi, 2003. "Cities and Specialization: Evidence from South Asia," Economics Series Working Papers 139, University of Oxford, Department of Economics.
  4. George J. Borjas, 2005. "Native Internal Migration and the Labor Market Impact of Immigration," NBER Working Papers 11610, National Bureau of Economic Research, Inc.
  5. David McKenzie & Steven Stillman & John Gibson, 2010. "How Important is Selection? Experimental VS. Non‐Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 913-945, 06.
  6. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, Elsevier, vol. 86(1), pages 43-60, April.
  7. Isaac Bayoh & Elena G. Irwin & Timothy Haab, 2006. "Determinants of Residential Location Choice: How Important Are Local Public Goods in Attracting Homeowners to Central City Locations?," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 97-120.
  8. Fafchamps, Marcel & Shilpi, Forhad, 2002. "The spatial division of labor in Nepal," Policy Research Working Paper Series 2845, The World Bank.
  9. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Isolation and Subjective Welfare," CEPR Discussion Papers 6001, C.E.P.R. Discussion Papers.
  10. Adams, Richard H, Jr, 1998. "Remittances, Investment, and Rural Asset Accumulation in Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 155-73, October.
  11. McCall, B P & McCall, J J, 1987. "A Sequential Study of Migration and Job Search," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 452-76, October.
  12. Timmins, Christopher, 2006. "Estimating spatial differences in the Brazilian cost of living with household location choices," Journal of Development Economics, Elsevier, vol. 80(1), pages 59-83, June.
  13. Mansuri, Ghazala, 2006. "Migration, school attainment, and child labor : evidence from rural Pakistan," Policy Research Working Paper Series 3945, The World Bank.
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