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The Moving Middle: Migration, Place Premiums and Human Development in Bolivia

Author

Listed:
  • George Gray Molina

    () (Human Development Report Office, United Nations Development Programme)

  • Ernesto Yañez

    () (Central Bank of Bolivia)

Abstract

Over half of Bolivian heads of household are lifetime migrants. This paper looks at the long term impact of internal migration over human development in Bolivia. Three issues frame these effects. First, twenty five years of rural to urban migration have transformed the demographic profile of Bolivian society. The new middle third is younger, more bilingual and better educated, with more access to social services than in the past. The poorest of the poor, however, did not migrate to the extent of the non-poor. Second, urban workers make approximately four times as much wages as identical workers in rural areas, controlling for age, ethnicity, and years of schooling. Two caveats dampen this place premium effect: schooling quality and informal insurance mechanisms that make migration more costly. Third, increases in human development can be associated to an “urbanization dividend” that made social services more accessible to first and second generation migrants over a twenty-five year period. Future increases in human development, however, are likely to depend on providing quality services and expanding socials services to the rural poor, rather on gains from urbanization. The key policy challenges of the future include both an expansion of services to the poorest of the poor in rural areas and breaking down discrimination barriers against women and indigenous people in urban labor markets.

Suggested Citation

  • George Gray Molina & Ernesto Yañez, 2009. "The Moving Middle: Migration, Place Premiums and Human Development in Bolivia," Human Development Research Papers (2009 to present) HDRP-2009-46, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Sep 2009.
  • Handle: RePEc:hdr:papers:hdrp-2009-46
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    More about this item

    Keywords

    Migration; human development; poverty; employment; schooling;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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