Migration Costs and Observational Returns to Migration in the Developing World

43 Pages Posted: 23 Mar 2020 Last revised: 1 Jun 2022

See all articles by David Lagakos

David Lagakos

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Samuel Marshall

University of Warwick

Ahmed Mushfiq Mobarak

Yale School of Management; Yale University - Cowles Foundation

Corey Vernot

Yale University

Michael Waugh

New York University (NYU) - New York University

Date Written: March 2020

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.

Suggested Citation

Lagakos, David and Marshall, Samuel and Mobarak, Ahmed Mushfiq and Vernot, Corey and Waugh, Michael, Migration Costs and Observational Returns to Migration in the Developing World (March 2020). NBER Working Paper No. w26868, Available at SSRN: https://ssrn.com/abstract=3559157

David Lagakos (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Samuel Marshall

University of Warwick ( email )

Ahmed Mushfiq Mobarak

Yale School of Management ( email )

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HOME PAGE: http://mba.yale.edu/faculty/profiles/mobarak.shtml

Yale University - Cowles Foundation

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New Haven, CT 06520-8281
United States

Corey Vernot

Yale University ( email )

Michael Waugh

New York University (NYU) - New York University ( email )

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