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Migration costs and observational returns to migration in the developing world

David Lagakos, Samuel Marshall, Ahmed Mobarak, Corey Vernot and Michael Waugh

Journal of Monetary Economics, 2020, vol. 113, issue C, 138-154

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.

Keywords: Rural-urban migration; Observational returns to migration; Migration costs; Rural-urban gaps; Gains from lowering migration costs (search for similar items in EconPapers)
JEL-codes: O11 O18 R23 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (25)

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Working Paper: Migration Costs and Observational Returns to Migration in the Developing World (2020) Downloads
Working Paper: Migration Costs and Observational Returns to Migration in the Developing World (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:113:y:2020:i:c:p:138-154

DOI: 10.1016/j.jmoneco.2020.03.013

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