Urban-rural gaps in the developing world: does internal migration offer opportunities?
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Citation (published version)David Lagakos. 2020. "Urban-Rural Gaps in the Developing World: Does Internal Migration Offer Opportunities?." Journal of Economic Perspectives, Volume 34, Issue 3, pp. 174 - 192. https://doi.org/10.1257/jep.34.3.174
This article provides an overview of the growing literature on urban-rural gaps in the developing world. I begin with recent evidence on the size of the gaps as measured by consumption, income, and wages, and argue that the gaps are real rather than just nominal. I then discuss the role of sorting more able workers into urban areas and review an array of recent evidence on outcomes from rural-urban migration. Overall, migrants do experience substantial gains on average, though smaller than suggested by the cross-sectional gaps. I conclude that future work should help further explore the frictions—in particular, information, financial, and in land markets—that hold back rural-urban migration and may help explain the persistence of urban-rural gaps.
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