How Do Labor Markets Equilibrate? Estimating the Effect of Local Labor Demand Shocks on Internal Migration and Local Wages

Project Description

A central question in the study of migration concerns the role that migrants play in bringing an economy towards a more efficient use of its resources.  Yet, largely due to the lack of reliable, micro-level data on internal migration, we have limited empirical understanding of how migration actually occurs and how the migration process brings about wage arbitrage and hence aggregate labor productivity.  The goal of the research we propose is to substantially improve our state of knowledge about migration within low income countries through the use of a novel source of internal migration data. The data source we propose to use contains the majority of mobile phone communications in Rwanda, Afghanistan, and Pakistan, which can be used to track the location of millions of individuals – and tens of thousands of internal migrants – on a day-to-day basis, over a period of several years.  The end goal is an improved understanding of internal migration in relation to inter-regional labor demand differentials, which is uncommonly precise due to the high frequency and high spatial resolution nature of our migration data.

Datalab Faculty

Joshua Blumenstock

Dave Donaldson (MIT)