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The aggregate productivity effects of internal migration: evidence from Indonesia

Bryan, Gharad and Morten, Melanie (2019) The aggregate productivity effects of internal migration: evidence from Indonesia. Journal of Political Economy, 127 (5). 2229 - 2268. ISSN 0022-3808

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Identification Number: 10.1086/701810

Abstract

We estimate the aggregate productivity gains from reducing barriers to internal labor migration in Indonesia, accounting for worker selection and spatial differences in human capital. We distinguish between movement costs, which mean workers will move only if they expect higher wages, and amenity differences, which mean some locations must pay more to attract workers. We find modest but important aggregate impacts. We estimate a 22 percent increase in labor productivity from removing all barriers. Reducing migration costs to the US level, a high-mobility benchmark, leads to a 7.1 percent productivity boost. These figures hide substantial heterogeneity. The origin population that benefits most sees a 104 percent increase in average earnings from a complete barrier removal, or a 25 percent gain from moving to the US benchmark.

Item Type: Article
Official URL: https://www.journals.uchicago.edu/toc/jpe/current
Additional Information: © 2019 University of Chicago
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JV Colonies and colonization. Emigration and immigration. International migration
Sets: Departments > Economics
Date Deposited: 05 Jun 2018 11:59
Last Modified: 09 Nov 2019 00:03
URI: http://eprints.lse.ac.uk/id/eprint/88177

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