The Welfare Effects of Encouraging Rural-Urban Migration
Ahmed Mobarak () and
No 2018-002, Working Papers from Human Capital and Economic Opportunity Working Group
This paper studies the welfare effects of encouraging rural-urban migration in the developing world. To do so, we build a dynamic incomplete-markets model of migration in which heterogeneous agents face seasonal income fluctuations, stochastic income shocks, and disutility of migration that depends on past migration experience. We calibrate the model to replicate a field experiment that subsidized migration in rural Bangladesh, leading to significant increases in both migration rates and consumption for induced migrants. The model’s welfare predictions for migration subsidies are driven by two main features of the model and data: first, induced migrants tend to be negatively selected on income and assets; second, the model’s non-monetary disutility of migration is substantial, which we validate using newly collected survey data from this same experimental sample. The average welfare gains are similar in magnitude to those obtained from an unconditional cash transfer, and greater than from policies that discourage migration, though migration subsidies lead to larger gains for the poorest households, which have the greatest propensity to migrate.
Keywords: rural-urban; migration (search for similar items in EconPapers)
JEL-codes: J61 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem, nep-dge, nep-mig, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Lagako ... fare-rural-urban.pdf First version, December, 2017 (application/pdf)
Working Paper: The Welfare Effects of Encouraging Rural-Urban Migration (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2018-002
Access Statistics for this paper
More papers in Working Papers from Human Capital and Economic Opportunity Working Group Contact information at EDIRC.
Bibliographic data for series maintained by Jennifer Pachon ().