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Prof. Ahmed Mushfiq Mobarak

Yale University, USA

Authors: Agha Ali Akram, Shyamal Chowdhury, and Ahmed Mushfiq Mobarak

Abstract: Rural to urban migration is an integral part of the development process, but there is little evidence on how out-migration transforms rural labor markets  Emigration could benefit landless village residents by reducing labor competition, or conversely, reduce productivity if skilled workers leave. We offer to subsidize transport costs for 5792 potential seasonal migrants in Bangladesh, randomly varying saturation of offers across 133 villages. The transport subsidies increase beneficiaries’ income due to better employment opportunities in the city, and also generate the following spillovers: (a) A higher density of offers increases the individual take-up rate, and induces those connected to offered recipients to also migrate. The village emigration rate increases from 35% to 65%. (b) This increases the male agricultural wage rate in the village by 4.5 - 6 .6 %, and the available work hours in the village by 11 - 14% , which combine to increase income earned in the village, (c) There is no intra-household substitution in labor supply, but primary workers within households earn more during weeks in which many of their village co-residents moved away. (d) The wage bill for agricultural employers increases, which reduces their profit, with no significant change in yield. (e) Food prices increase by 2.7% on net, driven by an increase in the price of (fish) protein, and offset by (f) a decrease in the price of non-tradables like prepared food and tea. Seasonal migration subsidies not only generate large direct benefits, but also indirect spillover benefits by creating slack in the village-of-origin labor market during the lean season.

JEL Codes: O1

Keywords: Seasonal migration, spillovers, general equilibrium, Bangladesh.

Full Text:  “Effects of Emigration on Rural Labor Markets”

Clemens Fuest, president of the Ifo Institute and Germany’s most influential economist of 2017, is coming to CERGE-EI to present the renowned EEAG (European Economic Advisory Group) Report. This year’s edition is entitled "What Now, With Whom, Where To – The Future of the EU".

Special guest Marek Mora, a member of the Bank Board of the Czech National Bank and a former head of the Budget, Tax and Regional Policy Directorate at the General Secretariat of the Council of the European Union, will present the Czech perspective and commentary on the report.

The Report is provided by the EEAG European Economic Advisory Group at CESifo. The 2018 edition will be published on 26 February, 2018, in Brussels, followed by presentations in selected European cities, including Prague.

The presentation will take place on Monday, 19 March, 2018 at 16:00 in the CERGE-EI building (Politickych veznu 7, Prague 1). As seats are limited, please register by March 14. The working language for the entire event will be English.