Migration costs and observational returns to migration in the developing world
Date
2020-08
Authors
Lagakos, David
Marshall, Samuel
Mobarak, Ahmed Mushfiq
Vernot, Corey
Waugh, Michael E.
Version
First author draft
OA Version
Citation
David Lagakos, Samuel Marshall, Ahmed Mushfiq Mobarak, Corey Vernot, Michael E Waugh. 2020. "Migration Costs and Observational Returns to Migration in the Developing World." Journal of Monetary Economics, Volume 113, pp. 138 - 154. https://doi.org/10.1016/j.jmoneco.2020.03.013
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.
Description
The version presented here is a Working Paper (or ‘pre-print’) that may be later published elsewhere.
License
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