Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks

Marieke Kleemans; Jeremy Magruder

doi:10.1111/ecoj.12510

Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks

Marieke Kleemans
, Jeremy Magruder

Economics

Research output: Contribution to journal › Article › peer-review

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	https://doi.org/10.1111/ecoj.12510
State	Published - Aug 2018

ASJC Scopus subject areas

Economics and Econometrics

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10.1111/ecoj.12510

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title = "Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks",

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.",

author = "Marieke Kleemans and Jeremy Magruder",

note = "We are grateful to Max Auffhammer, Michael Anderson, Sam Bazzi, Marshall Burke, David Card, Michael Clemens, Edward Miguel, Sofia Villas-Boas, Dean Yang and seminar participants at numerous presentations. We gratefully acknowledge financial support from the Berkeley Population Center and Kleemans acknowledges support from the AXA Research fund, and Magruder acknowledges support from the National Institute of Food and Agriculture. All errors are our own.",

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PY - 2018/8

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N2 - 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.

AB - 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.

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Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks

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