The books above arrived yesterday, making them the latest additions to my library. The picture does a decent job of capturing my general interests, intellectually speaking. My concern about and interest in the topic on the right is heavily influenced by the topic on the left. (I’ve made this evident in my past writing.) I’m excited to dive into both, but Gardner’s reminds me of some recent work on internal migration that I wanted to highlight:
Data from Indonesia show “moderate aggregate gains but important heterogeneity. Removing all frictions is predicted to increase aggregate productivity by 22 percent. These gains are modest relative to the potential gains suggested by studies such as Gollin et al. (2014), but are in line with what one may expect from other microeconomic studies. For the people born in some locations, however, the results are much larger, with predicted gains peaking at 104 percent. We show, theoretically and empirically, that gains are larger for origins that have higher dispersion in average wages across destinations. Because complete barrier removal may be impossible, we also compute the gains from moving to the US level of movement costs, which we see as a high-mobility benchmark. We predict an aggregate productivity boost of 7.1 percent, with the origin that gains most seeing a 25 percent increase. We conclude that while migration that improves the static allocation of labor is unlikely to have very large productivity effects of the sort estimated, for example, by Hsieh and Klenow (2009), targeted policies may have big impacts on the lives of some communities” (pg. 2232).
Data from China demonstrate “that, on net, increased access and returns to internal migration are beneficial for rural households. Food consumption becomes less variable. The findings rule out a negative wealth effect from having a migrant and rule out the possibility that the total consumption risk a household faces increases as a result of having a migrant. Furthermore, the results suggest that low-yielding assets are liquidated. The proceeds of the liquidation of the assets, potentially combined with net positive transfers from migrants, serve to increase households’ cash on hand. The increased cash on hand may fund the observed increase in food consumption and the observed increase in investment in high-risk, high-return assets. An alternative interpretation of the liquidation of low-yielding assets is that they were used to finance the costly migration of a household member” (pg. 111).
As Lant Pritchett has shown, labor mobility is the most well-established anti-poverty program around.