Internal mobility is a critical component of economic growth and development as it enables the reallocation of labor to more productive opportunities across sectors and regions. Using detailed district-to-district migration data from the 2001 Census of India, we highlight the role of the state borders as significant impediments to internal mobility. We find that average migration between neighboring districts in the same state is at least 50 percent larger than neighboring districts on different sides of a state border even after accounting for linguistic differences. While the impact of state borders differs by education, age and reason for migration, it is always large and significant. We suggest that inter-state mobility is inhibited by the existence of state level entitlement schemes, ranging from access to subsidized goods through the public distribution system to the bias for states’ own residents in access to tertiary education and public sector employment.
URL : 210617122419.pdf