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Migration Costs and Observational Returns to Migration in the Developing World

Author

Listed:
  • Lagakos, David

    (UCSD and NBER)

  • Marshall, Samuel

    (University of Warwick)

  • Mobarak, Ahmed Mushfiq

    (Yale University, NBER, Deakin University and CEPR)

  • Vernot, Corey

    (Yale University)

  • Waugh, Michael E.

    (New York University and NBER)

Abstract

Recent studies find that observational returns to rural-urban migration are near zero in three developing countries. We revisit this result using panel tracking surveys from six countries, finding higher returns on average. We then interpret these returns in a multi-region Roy model with heterogeneity in migration costs. In the model, the observational return to migration confounds the urban premium and the individual benefits of migrants, and is not directly informative about the welfare gain from lowering migration costs. Patterns of regional heterogeneity in returns, and a comparison of experimental to observational returns, are consistent with the model’s predictions.

Suggested Citation

  • Lagakos, David & Marshall, Samuel & Mobarak, Ahmed Mushfiq & Vernot, Corey & Waugh, Michael E., 2020. "Migration Costs and Observational Returns to Migration in the Developing World," The Warwick Economics Research Paper Series (TWERPS) 1265, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1265
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    Cited by:

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    2. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    3. Choumert-Nkolo, Johanna & le Roux, Leonard, 2024. "Leaving the hearth you know: Internal migration and energy poverty," World Development, Elsevier, vol. 180(C).
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    6. Tasso Adamopoulos & Loren Brandt & Chaoran Chen & Diego Restuccia & Xiaoyun Wei, 2022. "Land Security and Mobility Frictions," Working Papers tecipa-717, University of Toronto, Department of Economics.
    7. De Weerdt,Joachim & Christiaensen,Luc & Kanbur,Ravi, 2021. "When Distance Drives Destination, Towns Can Stimulate Development," Policy Research Working Paper Series 9622, The World Bank.
    8. Mckenzie,David J., 2022. "Fears and Tears : Should More People Be Moving within and from Developing Countries, andWhat Stops This Movement ?," Policy Research Working Paper Series 10128, The World Bank.
    9. Qingen Gai & Naijia Guo & Bingjing Li & Qinghua Shi & Xiaodong Zhu, 2021. "Migration Costs, Sorting, and the Agricultural Productivity Gap," Working Papers tecipa-693, University of Toronto, Department of Economics.
    10. Baysan, Ceren & Dar, Manzoor H. & Emerick, Kyle & Li, Zhimin & Sadoulet, Elisabeth, 2024. "The agricultural wage gap within rural villages," Journal of Development Economics, Elsevier, vol. 168(C).
    11. Mobarak, Ahmed Mushfiq & Sharif, Iffath & Shrestha, Maheshwor, 2021. "Returns to International Migration: Evidence from a Bangladesh-Malaysia Visa Lottery," IZA Discussion Papers 14232, Institute of Labor Economics (IZA).
    12. Zhang, Li & Xie, Lunyu & Zheng, Xinye, 2023. "Across a few prohibitive miles: The impact of the Anti-Poverty Relocation Program in China," Journal of Development Economics, Elsevier, vol. 160(C).
    13. Valerie Mueller & Camila Páez-Bernal & Clark Gray & Karen Grépin, 2023. "The Gendered Consequences of COVID-19 for Internal Migration," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(4), pages 1-37, August.
    14. Melissa Hidrobo & Valerie Mueller & Shalini Roy, 2022. "Cash transfers, migration, and gender norms," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 550-568, March.
    15. Zhe Liu & Zhenhong Qi & Qingsong Tian & John Stephen Clark & Zeyu Zhang, 2024. "The Impact of Digital Finance on Farmers’ Adoption of Eco-Agricultural Technology: Evidence from Rice-Crayfish Co-Cultivation Technology in China," Agriculture, MDPI, vol. 14(4), pages 1-20, April.
    16. Maria Caridad Araujo & Karen Macours, 2021. "Education, Income and Mobility: Experimental Impacts of Childhood Exposure to Progresa after 20 Years," PSE Working Papers halshs-03364972, HAL.
    17. Tushar Bharati & Wina Yoman, 2021. "Internal Migration and Labor Market Outcomes in Indonesia," Economics Discussion / Working Papers 21-05, The University of Western Australia, Department of Economics.
    18. Cirillo, Marinella & Cattaneo, Andrea & Miller, Meghan & Sadiddin, Ahmad, 2022. "Establishing the link between internal and international migration: Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 157(C).
    19. Lin, Pengsheng & Pan, Yinghao & Wang, Yuan & Hu, Longhai, 2024. "Reshaping unfairness perceptions: Evidence from China's Hukou reform," China Economic Review, Elsevier, vol. 83(C).

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    More about this item

    Keywords

    rural-urban migration ; observational returns to migration ; migration costs ; rural-urban gaps ; gains from lowering migration costs JEL codes: O11 ; O18 ; R23;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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