Essays on the determinants and consequences of internal migration (China, Thailand)

This paper includes two essays that investigate the determinants and consequences of internal migration in developing economies. The first essay uses the most comprehensive panel data from Chinese rural household surveys to study the determinants and the impacts of rural-urban migration in China. Empirical analysis shows that household size and migrant network increases the probability of migration, and that geographic location of households substantively impacts the probability of migration. Across income groups, the marginal effect of lagged income on the likelihood of migration remains the same. Contrary to the conventional wisdom that a huge flow of rural laborers disrupts agricultural production, this study concludes that household grain output declines by less than 2 percent upon migration while household net income increases by 16 percent as a result of migration.; The second essay introduces a dynamic model to analyze the link between migration and cross-province inequality in Thailand. The wage differential drives rural-urban migration and in turn the wage rate at the destination is affected by total amount of migrant labor supply. Migration generates a net income gain for migrants and they share that income gain with household members, remitting cash and goods. Remittances thus help redistribute income toward poor provinces, resulting in a lower level of cross-province inequality in household incomes. Simulations of migration, wages and inequality in production and in income suggest that the benchmark model provides a good approximation to Thai reality. Fixed effects estimation shows a statistically significant effect of migration on income inequality: increasing the mean fraction of out-migrants to Bangkok by 1 percent leads to a .058 reduction in the average ratio of Bangkok's income to all other provinces (an elasticity of -0.11).