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Migration Costs and Observational Returns to Migration in the Developing World

David Lagakos, Samuel Marshall, Ahmed Mushfiq Mobarak, Corey Vernot and Michael E. Waugh
Additional contact information
Samuel Marshall: University of Warwick
Ahmed Mushfiq Mobarak: Yale University, NBER, Deakin University and CEPR
Corey Vernot: Yale University
Michael E. Waugh: New York University and NBER

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Recent studies find that observational returns to rural-urban migration are near zero in three developing countries. We revisit this result using panel tracking surveys from six countries, finding higher returns on average. We then interpret these returns in a multi-region Roy model with heterogeneity in migration costs. In the model, the observational return to migration confounds the urban premium and the individual benefits of migrants, and is not directly informative about the welfare gain from lowering migration costs. Patterns of regional heterogeneity in returns, and a comparison of experimental to observational returns, are consistent with the model’s predictions.

Keywords: rural-urban migration; observational returns to migration; migration costs; rural-urban gaps; gains from lowering migration costs JEL codes: O11; O18; R23 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-int, nep-ore and nep-ure
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https://warwick.ac.uk/fac/soc/economics/research/w ... _1265_-_marshall.pdf

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Working Paper: Migration Costs and Observational Returns to Migration in the Developing World (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1265

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