Rural-Urban Migration at High Urbanization Levels
with Matias Busso and Nicolás Herrera L. Regional Science and Urban Economics, 2021.
This study assesses the empirical relevance of the Harris-Todaro model at high levels of urbanization — a feature that characterizes an increasing number of developing countries, which were largely rural when the model was created 50 years ago. Using data from Brazil, we compare observed and model-based predictions of the equilibrium urban employment rate of 449 cities and the rural regions that are the historic sources of their migrant populations. We find little support in the data for the most basic version of the model. However, extensions that incorporate labor informality and housing markets have much better empirical traction. Harris-Todaro equilibrium relationships are relatively stronger among workers with primary but no high-school education, and are more frequently found under certain conditions: when cities are relatively larger; and when associated rural areas are closer to the magnet city, and are populated to a greater degree by young adults, who are most likely to migrate.
What is Different About Urbanization in Rich and Poor Countries? Cities in Brazil, China, India, and the United States
with Ed Glaeser, Nina Tobio and Yurean Ma. Journal of Urban Economics 98: 17-49, 2017.
Are the well-known facts about urbanization in the United States also true for the developing world? We compare American metropolitan areas with analogous geographic units in Brazil, China, and India. Both Gibrat’s Law and Zipf’s Law seem to hold as well in Brazil as in the U.S., but China and India look quite different. In Brazil and China, the implications of the spatial equilibrium hypothesis, the central organizing idea of urban economics, are not rejected. The India data, however, repeatedly rejects tests inspired by the spatial equilibrium assumption. One hypothesis is that spatial equilibrium only emerges with economic development, as markets replace social relationships and as human capital spreads more widely. In all four countries, there is strong evidence of agglomeration economies and human capital externalities. The correlation between density and earnings is stronger in both China and India than in the U.S., strongest in China. In India the gap between urban and rural wages is huge, but the correlation between city size and earnings is more modest. The cross-sectional relationship between area-level skills and both earnings and area-level growth are also stronger in the developing world than in the U.S. The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.
Working paper version
Featured in the NBER digest (May 2016)
Press: Citylab, LiveMint (2016, 2017), PBS
Working Papers
Long-term effects of weather-induced migration on urban labor and housing markets
with Matias Busso
This paper explores the effects of weather-induced rural-urban migration on urban labor and housing markets in Brazil. In order to identify causal effects, it uses weather shocks to the rural municipalities of origin of migrants. We show that larger migration shocks led to an increase in employment growth and a reduction in wage growth of 4 and 5 percent, respectively. The increased migration flows also affected the housing market in destination cities. On average, it led to 1 percent faster growth of the housing stock, accompanied by 5 percent faster growth in housing rents. These effects vary sharply by housing quality. We find a substantial positive effect on the growth rates of the most precarious housing units (with no effect on rents) and a negative effect on the growth of higher-quality housing units (with a positive effect on rents). This suggests that rural immigration growth slowed down housing-quality upgrading in destination cities.
Revise and Resubmit, Journal of Urban Economics
Gender and electoral incentives: Evidence from crisis response
with Clemence Tricaud
While there is evidence of gender differences in leaders’ behavior, less is known about what drives these gaps. This paper uncovers the role of electoral incentives. Using a close election RD design in Brazil, we first show that female mayors handled the COVID-19 crisis differently over the year 2020, which ended with new municipal elections. We find that having a female mayor led to more deaths per capita at the beginning of the pandemic – a period characterized by uncertainty about the severity of the threat – but to fewer deaths per capita later in the year – a period where this uncertainty was reduced. We provide additional evidence that female mayors were less likely to close non-essential businesses early on, and more likely to do so at the end, and that residents in female-led municipalities were more likely to stay at home in the weeks surrounding the election. We then show that these results can be rationalized by a simple political agency model where politicians seek re-election and where voters assess female and male politicians’ actions differently. Consistent with this interpretation, we show that the gender differences we find are driven exclusively by mayors who were not term-limited and thus allowed to run for re-election and that the effects are stronger in municipalities with greater gender discrimination. Taken together, the results suggest that female and male leaders face different electoral incentives and adapt their policy decisions to voters’ gender-biased assessment.
Under revision
Why does COVID-19 affect some cities more than others? Evidence from Brazil
This paper investigates what explains the variation in impacts of COVID-19 across Brazilian cities. I assemble data from over 2,500 cities on COVID-19 cases and deaths, population mobility, and local policy responses. I study how these outcomes correlate with pre-pandemic local characteristics, drawing comparisons with existing US estimates when possible. As in the United States, the connections between city characteristics and outcomes in Brazil can evolve over time, with some early correlations fading as the pandemic entered a second wave. Population density is associated with greater local impact of the disease in both countries. However, in contrast to the US, the pandemic in Brazil took a greater toll in cities with higher income levels — consistent with the fact that higher incomes correlate with greater mobility in Brazil. Socioeconomic vulnerabilities, such as the presence of slums and high residential crowding, correlate with higher death rates per capita. Cities with such vulnerabilities in Brazil suffered higher COVID-19 death rates despite their residents’ greater propensity to stay home. Policy responses do not appear to drive these connections.
Submitted
The younger age profile of COVID-19 deaths in developing countries
with Annabelle Fowler and Nicolás Herrera L.
This study assesses the empirical relevance of the Harris-Todaro model at high levels of urbanization — a feature that characterizes an increasing number of developing countries, which were largely rural when the model was created 50 years ago. Using data from Brazil, we compare observed and model-based predictions of the equilibrium urban employment rate of 449 cities and the rural regions that are the historic sources of their migrant populations. We find little support in the data for the most basic version of the model. However, extensions that incorporate labor informality and housing markets have much better empirical traction. Harris-Todaro equilibrium relationships are relatively stronger among workers with primary but no high-school education, and are more frequently found under certain conditions: when cities are relatively larger; and when associated rural areas are closer to the magnet city, and are populated to a greater degree by young adults, who are most likely to migrate.
Submitted
Rural Spillovers of Urban Growth
with Sam Asher, Idaliya Grigoryeva, and Paul Novosad
As cities in developing countries continue to grow rapidly, there is insufficient empirical evidence on how this affects growth in surrounding rural economies. We study the effects of shocks to labor demand in cities on village-level economic outcomes, using a new dataset with administrative data from multiple sources on the universe of urban and rural economies in India.
Under revision
Gender-Segmented Labor Markets and the Effects of Local Demand Shocks
Gender segmentation in the labor market is widespread. However, most existing studies of the effects of labor demand shocks on local economies assume away gender. In this paper, I show that local labor demand shocks can lead to different outcomes depending on whether they favor male or female employment. I develop a spatial equilibrium model that features gender segmented labor markets and joint mobility frictions, which predicts that couples are more likely to migrate in response to male opportunities. As a result, positive shocks to local labor demand for men lead to population growth, increases in female labor supply, and housing demand growth. Meanwhile, equivalent shocks to labor demand for women lead to smaller inflows of migrant workers, and labor force participation is a relatively more important margin of adjustment in this case. I find strong empirical support for the model’s predictions in the context of Brazil during 1991-2010. Comparing the effects of gender-specific labor demand shocks, I show that male shocks produce a higher migratory response and make localities more populated and expensive. These results imply that place-making policies that create jobs for females are more likely to benefit residents while those that create male jobs are more likely to benefit immigrants and landlords.
Under revision
Public Education Investment and Local Labor Markets. Evidence from a Large Federal Program
Do primary education investments improve local labor market outcomes? In principle, education could lead to higher local productivity, but potential benefits to local economies could be muted if workers migrate in search of better opportunities, or if shifts in the supply of skills outpace demand growth. I use a large program that redistributed public education finance across Brazilian municipalities (FUNDEF) as a source of exogenous variation to empirically study the effects of expansions in public education expenditure on attainment and labor market outcomes at the individual and the local economy levels. The program was successful at improving primary educational attainment levels for individuals and microregions (local labor markets). High-exposure individuals experienced higher wages and a higher likelihood of migrating to a different local economy. High-exposure microregions saw negative effects on the growth of average wages and other labor market outcomes with the exception of employment, suggesting that the increased supply of educated workers was not matched by demand growth.