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  4. September 2016
  5. Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia

Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia

  • Samuel Bazzi
  • Arya Gaduh
  • Alexander D. Rothenberg
  • Maisy Wong
American Economic Review
vol. 106, no. 9, September 2016
(pp. 2658-98)
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Abstract

We use a natural experiment in Indonesia to provide causal evidence on the role of location-specific human capital and skill transferability in shaping the spatial distribution of productivity. From 1979-1988, the Transmigration Program relocated two million migrants from rural Java and Bali to new rural settlements in the Outer Islands. Villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later. We find some evidence of migrants' adaptation to agroclimatic change. Overall, our results suggest that regional productivity differences may overstate the potential gains from migration.

Citation

Bazzi, Samuel, Arya Gaduh, Alexander D. Rothenberg, and Maisy Wong. 2016. "Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia." American Economic Review, 106 (9): 2658-98. DOI: 10.1257/aer.20141781

Additional Materials

JEL Classification

  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J43 Agricultural Labor Markets
  • J61 Geographic Labor Mobility; Immigrant Workers
  • O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • Q13 Agricultural Markets and Marketing; Cooperatives; Agribusiness