Determinants And Welfare Effects Of Rural-Urban Migration

In the past few decades,the rural-urban migration rate in Pakistan has witnessed an exponential growth rate.It has significant implications for rural areas i.e.,migrants' places of origin,and the quality of life of migrants in the places of destination.However,it is almost ignored or has not been analyzed in the literature relevant to Pakistan.This research aims to reveal the micro and macro determinants of migration and to understand its welfare effects on migrant workers' employment quality and household welfare.The study utilizes primary and secondary data sources to achieve the objectives.To study the macro determinants of migration,we used secondary datasets from various data sources such as FAO and World Bank's World Development Indicators(WDI)from 1980 to 2016.These data are used to study the relationship between agricultural productivity and rural-urban migration through an econometric model.To study the micro determinants and welfare effects of rural-urban migration on employment quality and household income,we used survey data collected from four major regions of Punjab Pakistan.These data include 504 migrant and non-migrant families in rural areas,and 252 migrant workers in urban areas.The study uses several analytical techniques to analyze the data.First,a descriptive analysis on primary data is conducted to understand the demographic characteristics of migrant and non-migrant households,the causes of migration,and welfare indicators of migrant workers.Second,to study the macro determinants of rural-urban migration,the paper uses a recursive equation model which links agricultural productivity to migration equation through a chain process.The purpose of using this model was to indirectly estimate migration elasticities with respect to urban-rural wage ratios and population age structure.Third,a logistic regression model was used to identify the micro determinants of rural-urban migration.The dependent variable in the logistic regression was the migration decision.The paper analyzes various factors which may affect the rural households' decision to migrate.Fourth,the welfare effects of rural-urban migration on employment quality of migrant workers were analyzed using an IV probit and two-step sequential estimation model.The study uses subjective and objective indicators to evaluate employment quality and incorporated this variable as dependent variable in the employment quality models.Finally,propensity score matching(PSM)technique is applied to study the welfare effects of rural-urban migration on rural households' income.The results of descriptive analysis reveal that migrant households consisted of younger and small families with better education levels as compared to non-migrant households.The main reasons of migration included the pursuit of education and employment opportunities in the urban areas.Urban areas offer higher wages and more regular work opportunities,which are the main pull factors for migrants,as the chances to provide for their families left behind in rural areas rise after migration.Hence,the simple solution to the deprived living conditions of such individuals lies in the migration for their survival.The results further revealed that migrant workers were better off in the urban areas in terms of employment quality and household income.However,the average wage rate earned by migrant workers was just close the minimum wage rate in Pakistan.This finding shows that the migrants usually earn lower incomes as compared to urban workers.The main reasons for this low wage rate of migrant workers was their lower education level.Based on secondary datasets from various data sources such as FAO and World Bank's World Development Indicators(WDI)from 1980 to 2016,the paper analyzes the macro determinants of rural-urban migration in Pakistan by recursive equation model.It reveals that agricultural productivity in rural areas is sensitive to key agricultural inputs such as livestock,fertilizers,and infrastructure facilities in rural areas.However,agricultural productivity is inelastic to the rural labor force which implies that additional workers do not increase aggregate output and the marginal agricultural labor productivity in Punjab.This finding is consistent with the proposition that economic incentives are key drivers of rural-urban migration.The results further showed that,for every 1% increase in urbanrural wage ratio,migration increases by 0.83%.In addition,we found that rural-urban migration rate is faster in areas which have higher proportions of younger populations.The analytical results related to micro determinants of migration shows that rural households' socioeconomic characteristics such as older ages,larger family size,joint family system,and larger agricultural landholdings reduce the likelihood of migration,whereas higher education increases the probability of migration.Further,the existence of social and infrastructure facilities in rural areas may reduce the probability of migration.In addition,the results indicated that the chances of migration are increased by conflicts,insecurity,and occurrence of natural calamities in the rural areas.One new insight from the results of this model is the emergence of family disputes as a significant determinant of migration.Previous literature on migration in Pakistan has not given due attention to this variable.Another push factor of migration was the poor living conditions of households as these households tend to send their young family members to urban centers more than the households that have stable livelihood conditions.However,education was the most important determinant of migration as the migrants with better education or skills tend to have better employment opportunities in urban areas than unskilled labor.The analytical results related to welfare effects of rural-urban also provided new insights into migration in Pakistan.Firstly,migrant workers are better off in their new urban settings in terms of improved incomes and better living conditions,but their social protection status is still poor.The proportion of migrant workers having permanent jobs and written contracts with their employers was very low.Secondly,the results indicate that migration is a successful strategy for rural households to improve the quality of their employment.The results of IV probit model showed that both the characteristics of migrants and their native households affect the relative improvement in the quality of employment.One interesting finding in this case is that the poor households produce poor migrants.Thirdly,the results of the propensity score matching technique shows that migration has a positive impact on rural households' income,and these impacts are more pronounced in big cities.According to the results of this study,it is suggested that,on the one hand,policymakers in Pakistan should pay attention to improving social and infrastructure facilities,public security,and agricultural productivity,to avoid the brain drain of rural areas.On the other hand,it is suggested to implement labor laws so that migrants can obtain health insurance and social security in their employment places,thus providing better-quality employment for migrant workers.