How do income shocks affect international migration flows from poor countries? Income growth not only increases the opportunity cost of migration but also eases liquidity constraints. I develop a method to separate these countervailing individual effects and identify the overall income elasticity of migration. Using new administrative and census data from Indonesia, I find that positive agricultural income shocks increase labor emigration flows, particularly in villages with relatively more small landholders. However, in the most developed rural areas, persistent income shocks reduce emigration. Overall, the findings highlight the important role of wealth heterogeneity in shaping migration flows as incomes rise.
"Wealth Heterogeneity and the Income Elasticity of Migration."
American Economic Journal: Applied Economics,
Agricultural Labor Markets
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Agriculture: Aggregate Supply and Demand Analysis; Prices
Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics