Journal of Monetary Economics 2020 DOI: 10.1016/j.jmoneco.2020.03.013 View full text
David Lagakos, Samuel Marshall, Ahmed Mushfiq Mobarak, Corey Vernot, Michael E. Waugh

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 mi…

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