Abstract
We study the labour market impact of internal migration in Indonesia by instrumenting migrant flows with rainfall shocks at the origin area. Estimates reveal that a one percentage point increase in the share of migrants decreases income by 0.97% and reduces employment by 0.24 percentage points. These effects are different across sectors: employment reductions are concentrated in the formal sector, while income reduction occurs in the informal sector. Negative consequences are most pronounced for low-skilled natives, even though migrants are systematically highly skilled. We suggest that the two-sector nature of the labour market may explain this pattern.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 2032-2065 |
| Number of pages | 34 |
| Journal | Economic Journal |
| Volume | 128 |
| Issue number | 613 |
| DOIs | |
| State | Published - Aug 2018 |
ASJC Scopus subject areas
- Economics and Econometrics