Agglomeration, Pollution, and Migration: A Substantial Link, and Policy Design

Oded Stark, Yu Pang and Simon Fan

A chapter in World Scientific Handbook of Global Migration, Volume 3: Types of Migrants and Economies: A Global Perspective, 2024, pp 199-225 from ZBW - Leibniz Information Centre for Economics

Abstract: We study a developing countries setting in which agglomeration efficiency of urban production attracts rural-to-urban migration, whereas urban pollution deters rural-to-urban migration. By means of a general equilibrium model we study the formation of policies aimed at striking a socially optimal balance between supporting efficient levels of urban agglomeration and mitigating urban pollution in the presence of endogenous rural-to-urban migration. We show that without government intervention, although rural-to-urban migration contributes to agglomeration economies, it does not improve social welfare because it also exacerbates environmental degradation. We also show that urban pollution problems cannot be resolved by means of environmental regulation alone: for example, an emissions tax aimed at curbing urban pollution can backfire as and when it increases the appeal of rural-to-urban migration. A policy of emissions tax in conjunction with a subsidy to rural individuals is an effective means of enhancing urban productivity while reducing urban pollution.

Keywords: Rural-to-urban migration; Industrial emissions; Polluting urban agglomeration; Environmental regulation; Policy formation (search for similar items in EconPapers)
JEL-codes: H23 J61 O15 R23 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Agglomeration, pollution, and migration: A substantial link, and policy design (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eschap:297286

DOI: 10.1142/9789811248146_0009

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