Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: May, 2023, Volume 91, Issue 3

The Welfare Effects of Encouraging Rural–Urban Migration

https://doi.org/10.3982/ECTA15962
p. 803-837

David Lagakos, Ahmed Mushfiq Mobarak, Michael E. Waugh

This paper studies the welfare effects of encouraging rural–urban migration in the developing world. To do so, we build and analyze a dynamic general‐equilibrium model of migration that features a rich set of migration motives. We estimate the model to replicate the results of a field experiment that subsidized seasonal migration in rural Bangladesh, leading to significant increases in migration and consumption. We show that the welfare gains from migration subsidies come from providing better insurance for vulnerable rural households rather than from correcting spatial misallocation by relaxing credit constraints for those with high productivity in urban areas that are stuck in rural areas.


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Supplemental Material

Supplement to "The Welfare Effects of Encouraging Rural-Urban Migration"

David Lagakos, Mushfiq Mobarak, and Michael E. Waugh

This online appendix contains material not found within the manuscript.

Supplement to "The Welfare Effects of Encouraging Rural-Urban Migration"

David Lagakos, Mushfiq Mobarak, and Michael E. Waugh

This zip file contains the replication files for the manuscript.

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