Returns to migration: the role of educational attainment in rural Tanzania

Yuya Kudo

No 322, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Given the migration premium previously identified in an impact evaluation approach, this paper asks the question of why migration is not more prominent, given such high premium associated with it. Using long-term household panel data drawn from rural Tanzania, Kagera for the period 1991-2004, this study aims to answer this question by exploring the contribution of education in the migration premium. By separating migrants into those that moved out of original villages but remained within Kagera and those who left the region, this study finds that, in consumption, the return on investment in education is higher at both destinations. However, whilst the higher return on education fully explains the gains associated with migration within Kagera, it only partly explains those of external migration. These findings suggest that welfare opportunities are higher at the destination and that an individual's limited investment in education plays a major role in preventing short-distance migration from becoming a significant source of raising welfare, which is not the case for long-distance migration. While education plays a role, it appears that other mechanisms may prohibit rural agents from exploiting the arbitrage opportunity when they migrate to the destination at a great distance from the source.

Keywords: Tanzania; Population movement; Migration; Education; Rural societies; Africa; Internal migration; School Investment; Return to education; Welfare growth (search for similar items in EconPapers)
JEL-codes: I25 J61 J62 O15 R23 (search for similar items in EconPapers)
Date: 2012-02-01
New Economics Papers: this item is included in nep-afr, nep-dev, nep-lab and nep-mig
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 322. 2012-02-01

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