TY  - JOUR
AU  - Bryan, Gharad
AU  - Morten, Melanie
TI  - The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 23540
PY  - 2017
Y2  - June 2017
DO  - 10.3386/w23540
UR  - http://www.nber.org/papers/w23540
L1  - http://www.nber.org/papers/w23540.pdf
N1  - Author contact info:
Gharad T. Bryan
London School of Economics
Houghton Street
London WC2A 2AE
United Kingdom
E-Mail: g.t.bryan@lse.ac.uk

Melanie Morten
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305
E-Mail: memorten@stanford.edu
AB  - 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 only move 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% increase in labor productivity from removing all barriers. Reducing migration costs to the US level, a high mobility benchmark, leads to an 8% productivity boost. These figures hides substantial heterogeneity. The origin population that benefits most sees an 104% increase in average earnings from a complete barrier removal, or a 37% increase from moving to the US benchmark.
ER  -