Internal Migration and the Spatial Reorganization of Agriculture

Raahil Madhok, Frederik Noack, Ahmed Mobarak and Olivier Deschenes

No 20241, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper studies how agricultural production responds to the loss of agricultural labor during the process of urbanization and structural transformation. Using household microdata from India and exogenous variation in migration opportunities induced by urban income shocks, we show that agricultural households do not systematically replace lost labor with increased capital. Instead, they cultivate less land and lower their use of agricultural technology, reducing crop production. Changing land and crop prices induce non-migrant households to expand agricultural investments and production. In aggregate, market adaptation mitigates over three-fourths of the direct agricultural losses from urbanization. Spatial reorganization moves food production from land near urban areas toward more remote areas with lower emigration.

Keywords: India (search for similar items in EconPapers)
JEL-codes: J43 O13 O15 Q15 Q16 R11 R12 (search for similar items in EconPapers)
Date: 2025-05
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