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Migration Costs and Observational Returns to Migration in the Developing World

David Lagakos, Samuel Marshall, Ahmed Mushfiq Mobarak, Corey Vernot, Michael E. Waugh

NBER Working Paper No. 26868
Issued in March 2020
NBER Program(s):Development Economics, Economic Fluctuations and Growth, Labor Studies

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.

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Document Object Identifier (DOI): 10.3386/w26868

Published: David Lagakos & Samuel Marshall & Ahmed Mushfiq Mobarak & Corey Vernot & Michael E. Waugh, 2020. "Migration Costs and Observational Returns to Migration in the Developing World," Journal of Monetary Economics, .

 
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