Internal Migration and Borrowing Constraints: Evidence from Peru
The decision to migrate has received substantial attention from both theoretical and empirical perspectives. Underlying most analyses is the desire to understand why individuals relocate within their own country, or more drastically, migrate to another country. While there are numerous reasons to migrate, economists have focused their research on the notion that there are gains to be made from migration: ceteris paribus, migrants are expected to earn more than non-migrants (Todaro, 1989). This paper utilizes a rich data set from Peru to assess the determinants of migration. We find that, when controlling for self- selection, migrants do not earn more than “stayers.”
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