Migration Costs and Observational Returns to Migration in the Developing World
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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Copy CitationDavid Lagakos, Samuel Marshall, Ahmed Mushfiq Mobarak, Corey Vernot, and Michael E. Waugh, "Migration Costs and Observational Returns to Migration in the Developing World," NBER Working Paper 26868 (2020), https://doi.org/10.3386/w26868.Download Citation
Published Versions
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, . citation courtesy of 
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