American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Hidden Income and the Perceived Returns to Migration
American Economic Journal: Applied Economics
(pp. 321–52)
Abstract
In many developing economies, urban workers earn substantially more than rural workers with the same level of education. Why don't more rural workers migrate to cities? I use two field experiments in Kenya to show that low migration is partly due to underestimation of urban incomes, which is sustained by income hiding by migrants. Parents at the origin underestimate their migrant children's incomes by nearly half, and underestimation is greater when a migrant's remittance obligations are high. Providing information about urban earnings increases migration to the capital city by about 40 percent over two years.Citation
Baseler, Travis. 2023. "Hidden Income and the Perceived Returns to Migration." American Economic Journal: Applied Economics 15 (4): 321–52. DOI: 10.1257/app.20210571Additional Materials
JEL Classification
- C93 Field Experiments
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- J82 Labor Standards: Labor Force Composition
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics