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Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks

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  • Marieke Kleemans
  • Jeremy Magruder

Abstract

We study the labour market impact of internal migration in Indonesia by instrumenting migrant flows with rainfall shocks at the origin area. Estimates reveal that a one percentage point increase in the share of migrants decreases income by 0.97% and reduces employment by 0.24 percentage points. These effects are different across sectors: employment reductions are concentrated in the formal sector, while income reduction occurs in the informal sector. Negative consequences are most pronounced for low‐skilled natives, even though migrants are systematically highly skilled. We suggest that the two‐sector nature of the labour market may explain this pattern.

Suggested Citation

  • Marieke Kleemans & Jeremy Magruder, 2018. "Labour Market Responses To Immigration: Evidence From Internal Migration Driven By Weather Shocks," Economic Journal, Royal Economic Society, vol. 128(613), pages 2032-2065, August.
    • Handle: RePEc:wly:econjl:v:128:y:2018:i:613:p:2032-2065
    DOI: 10.1111/ecoj.12510
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    Cited by:

    1. Jaiswal, Sreeja & Balietti, Anca & Schäffer, Daniel, 2023. "Environmental Protection and Labor Market Composition," Working Papers 0736, University of Heidelberg, Department of Economics.
    2. Barbora Šedová & Lucia Čizmaziová & Athene Cook, 2021. "A meta-analysis of climate migration literature," CEPA Discussion Papers 29, Center for Economic Policy Analysis.
    3. Frédéric Docquier & Lucas Guichard & Stefano Iandolo & Hillel Rapoport & Riccardo Turati & Gonzague Vannoorenberghe, 2022. "Populism and the Skill-Content of Globalization: Evidence from the Last 60 Years," CESifo Working Paper Series 10068, CESifo.
    4. Dang, Hai-Anh H & Hallegatte, Stephane & Trinh, Trong-Anh, 2023. "Does Global Warming Worsen Poverty and Inequality? An Updated Review," IZA Discussion Papers 16570, Institute of Labor Economics (IZA).
    5. Sharp, Matthew, 2021. "The labour market impacts of female internal migration: Evidence from the end of Apartheid," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    6. Wenjie Zhang & Xianqiang Zou & Chuliang Luo & Lulu Yuan, 2024. "Hukou reform and labor market outcomes of urban natives in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-41, June.
    7. Jaime Lara & Marla Cruz Yedra & Diana V. Moyeda López & Adriana Prats Molina & José A. Tellez Muñoz, 2020. "Migración rural urbana e informalidad en las zonas metropolitanas de México. Una estimación de corto plazo," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 35(2), pages 297-329.
    8. Lukas Delgado-Prieto, 2024. "Immigration, wages, and employment under informal labor markets," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-34, June.
    9. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    10. Fernando M. Aragón & Francisco Oteiza & Juan Pablo Rud, 2018. "Climate change and agriculture: farmer adaptation to extreme heat," IFS Working Papers W18/06, Institute for Fiscal Studies.
    11. Clement Imbert & Marlon Seror & Yifan Zhang & Yanos Zylberberg, 2022. "Migrants and Firms: Evidence from China," American Economic Review, American Economic Association, vol. 112(6), pages 1885-1914, June.
    12. repec:ags:aaea22:335558 is not listed on IDEAS
    13. Narcisse Cha'Ngom & Christoph Deuster & Frédéric Docquier & Joël Machado, 2023. "Selective Migration and Economic Development: A Generalized Approach," LISER Working Paper Series 2023-06, Luxembourg Institute of Socio-Economic Research (LISER).
    14. Julia Brewer & Ashley Larsen & Frederik Noack, 2024. "The land use consequences of rural to urban migration," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 177-205, January.
    15. Richard Akresh & Daniel Halim & Marieke Kleemans, 2023. "Long-Term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia," The Economic Journal, Royal Economic Society, vol. 133(650), pages 582-612.
    16. Fernando M. Aragón & Francisco Oteiza & Juan Pablo Rud, 2018. "Climate Change and Agriculture: Farmer Adaptation to Extreme Heat," Discussion Papers dp18-02, Department of Economics, Simon Fraser University.
    17. Zheng, Xiaodong & Fang, Zuyi & Wang, Yajun & Fang, Xiangming, 2022. "When left-behind children become adults and parents: The long-term human capital consequences of parental absence in China," China Economic Review, Elsevier, vol. 74(C).
    18. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    19. Cornelius Christian & Lukas Hensel & Christopher Roth, 2019. "Income Shocks and Suicides: Causal Evidence From Indonesia," The Review of Economics and Statistics, MIT Press, vol. 101(5), pages 905-920, December.
    20. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    21. Sichko, Christopher, 2021. "Migrant Selection and Sorting during the Great American Drought," SocArXiv wm2p3, Center for Open Science.
    22. Busso, Matías & Chauvin, Juan Pablo, 2023. "Long-term Effects of Weather-induced Migration on Urban Labor and Housing Markets," IDB Publications (Working Papers) 12668, Inter-American Development Bank.

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