Intersectoral Migration in Southeast Asia: Evidence from Indonesia, Thailand, and the Philippines

Abstract

Using time series data spanning three decades, Butzer, Mundlak, and Larson examine the determinants of sectoral migration in Indonesia, Thailand and the Philippines. They employ a principal components algorithm to address problems associated with trended and intercorrelated explanatory variables. Migration rates in the three countries are low relative to other developing countries with the consequence of persistent intersectoral income differentials. Even so, the rate of migration has been responsive to income ratios in each country. The migration rates were also affected by the absorbing capacity of nonagriculture, as indicated by several measures. In contrast to other studies, policy variables consisting of indicators of physical and human capital had little impact on the migration rate separate from that captured by relative incomes.

This paper - a product of Rural Development, Development Research Group - is part of a larger effort in the group to assess the role of the rural sector in economic growth. The study was partially funded by the Research Support Budget under the research project "Dynamism of Rural Sector Growth" (RPO 683-06).