Rural-Urban Migration and Income Disparity in Tunisia: A Decomposition Analysis

Since the 1990s, massive migration from the marginalized and unprivileged rural areas to small and big towns has been one of the most dramatic and noticeable demographic changes in Tunisia. Even though it has been the focus of abundant research over the recent decades, no study has focused on the earnings differentials between rural-urban migrants and rural stayers. This paper may be the first to investigate such differentials in the Tunisian context. It uses firstly the ELL's methodology to impute into the 2004 census data the per capita expenditures from the 2005 household survey. Then, a decomposition analysis of the welfare gap between migrants and non-migrants is performed using the Oxaca and Blinder's method. It also investigates the main determinants that drive such disparities in order to evaluate how economic and social-demographic factors contribute to the earning gap between the two groups. Our findings indicate that even though some migrants incur welfares losses, rural-urban migration increases on average the welfare of migrants. They show as well that the welfare gaps between migrants and non-migrants are mainly due to the differences in endowments. Education is found to exert the strongest influence on welfare differences and big cities, more specifically the Greater Tunis, is found to attract massively the skilled migrants and enjoy the benefit of agglomeration economies.