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American Economic Review Vol. 106 No. 9 2016

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

Samuel Bazzi1; Arya Gaduh2; Alexander D. Rothenberg3; Maisy Wong4

1 Department of Economics, Boston University, 270 Bay State Road, Boston, MA 02215 (e-mail: ) · 2 Department of Economics, Sam M. Walton College of Business, University of Arkansas, Business Building 402, Fayetteville, AR 72701 (e-mail: ) · 3 RAND Corporation, 1200 South Hayes Street, Arlington, VA 22202 (e-mail: ) · 4 Wharton Real Estate, University of Pennsylvania, 3620 Locust Walk, 1464 SHDH, Philadelphia, PA 19104 (e-mail: )

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.

DOI
10.1257/aer.20141781
Volume
106
Issue
9
Pages
2658-2698
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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