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Migration Patterns

The Short-Run Costs of Moving: Internal Migration and Consumption Growth in Indonesia

Author : Valeria Groppo, Mariapia Mendola | 2016
Published By: Editorial Express

The paper studies how internal migration impacts consumption in migrants’ origin households in the short-run. We analyze the case of Indonesia, using the longitudinal dataset Indonesia Family Life Survey (IFLS). In particular, we use IFLS1997 and IFLS2000 and estimate how origin households’ consumption growth in the period 1997-2000 is affected by these households having internal migrants in the same period. We tackle the endogeneity of migration via a difference-in-differences approach, coupled with the use of instrumental variables. While taking into account the endogeneity of internal migration, we also distinguish the effects of having a current or a return migrant. Our instrumental variable estimates indicate that having an internal return migrant significantly reduces origin households’ consumption growth in the short-run. This holds independently of the consumption measure used as dependent variable. Differently, the effect of current migration depends on the consumption measure used. The negative impact of return migration is likely to be related to a lower income potential of migrants upon return.

URL : https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=ESPE2014&paper_id=595

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