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Wealth Heterogeneity and the Income Elasticity of Migration

Samuel Bazzi

No wp2016-003, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: How do income shocks affect international migration flows from poor countries? Income growth not only increases the opportunity cost of migration but also eases liquidity constraints. I develop a method to separate these countervailing individual effects and identify the overall income elasticity of migration. Using new administrative and census data from Indonesia, I find that positive agri- cultural income shocks increase labor emigration flows, particularly in villages with relatively more small landholders. However, in the most developed rural areas, persistent income shocks reduce emigration. Overall, the findings highlight the important role of wealth heterogeneity in shaping migration flows as incomes rise.

Keywords: International Migration; Wealth Heterogeneity; Income Elasticity; Liquidity Constraints (search for similar items in EconPapers)
JEL-codes: F22 F66 J21 J61 O15 Q15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-mig
Date: 2016-04
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https://sites.google.com/site/samuelbazzi/research/BazziJMP_Manuscript.pdf

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Journal Article: Wealth Heterogeneity and the Income Elasticity of Migration (2017) Downloads
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