 So I want to take us back to thinking about the source areas of the migrants As they leave rural areas, what's what's happening to them? Before I really do that I want to motivate a little bit So I think a third of my presentation is gonna be motivation and then I'm gonna talk through a bit of a review of the literature or the what I a bit of a review of the literature let's call it The empirical literature on the linkage between migration and agriculture So at least if nothing else I really want to convince you that we have to take an empirical look at these questions Rather than just a theoretical look because the theoretical look won't tell us exactly. What's what's happening? So just to motivate a bit Volunt and I'm also gonna not talk so much about quote-unquote forced migration Forced migrations, maybe not the greatest term I've been thinking about that for a second piece that I'm writing right now, but I'm not thinking about environmental displacement I'm not talking about conflict displacement I'm talking about people who are making decisions to leave to make their Presumably to make their lives better off Okay, so that said we know that there's there's an empirical regularity and Jacob Showed this this morning. I think That countries with higher GDP have a lower share of labor in agriculture Migrants might go to urban areas They might also go to rural areas and in fact in the micro data from from sub-Saharan Africa We see quite a bit of migration from rural to rural areas So just this this picture some of you have seen those of you who are here for yaku's presentation I've seen this picture before Today, I'm gonna show you another graph where I made up the letters because I was on the plane But that's coming There I go saying something stupid on the camera right away the This is another look at it though So this is looking at just a cross-section anybody can pull this out of the the world Development indicators this took me 10 minutes literally to make and I first saw this graph in graduate school Taylor and Martin had it in the handbook a Similar graph in the handbook of agricultural economics on migration and agriculture in 2001 This is the 2016 data. It has exactly the same pattern as the 2001 data. So it's really it's it's still there Basically is what I'm trying to tell you It's also in the world development report in 2008 similar graph. So you can you can you can go home and make this graph It's really easy To show you a different view. This is what's happening to the rural population share in the 10 largest developing Quote-unquote developing countries. I guess anything down to to middle-income countries So by population so we see that Ethiopia has the highest this is a 20 year look So from 1996 to 2015 In every single country we see the rural or the rural population shared decline over those those 20 years So several countries have gone below Indonesia and China are now below 50% But everybody's seeing a movement into urban area every country is seeing in a movement into urban areas And we also know that fertility rates are actually lower in urban areas So this is kind of should naturally be increasing slightly Okay, so that's to convince you that that rural urban Rural urban migration is a pretty important issue to be thinking about Okay, second issue is that international migration is more complicated from a rural perspective, but One many small countries rely on remittances for a substantial share of GDP To migration is quite not the largest share of GDP for some of these larger economies Bangladesh Pakistan the Philippines Mexico, but it's an important source of labor for those those countries and Actually international migrant the international migrant origin is often from rural areas and and I've just been putting pulling this Whoops, okay, so this is so second slide will be that graph, but the first one here is just remittances as a share of GDP Is is actually 30% in Nepal 30% in Liberia 29% in Tajikistan, so they're quite a lot of small countries. I've actually from this I took a Mix of countries I left out the Pacific Islands because those have extremely high shares of GDP from remittances Even a country like Bangladesh with a country with a population of 160 million has eight almost eight percent of its GDP coming in from remittances So remittances can be a really substantial share of of GDP for some countries I Think I took a mix from different different Continents in this context This is the the point on international migrant migration from rural areas. I've just been pulling these these Statistics together. This is actually hard to find data on What I've got here on the y-axis is the percent of international migrants who came from rural areas and then the share of the population that's rural on the the x-axis and You can see that there'd be like a 45 degree line and most of the countries here in that I've found data for Fall on the the 45 degree line So the the data gent the data here are difficult to find in part because you need a fairly large data source That has migration information in it to be able to come up with a figure like this And then if it's not a census a few of these are censuses But if it's not a census then you need to have accurately defined weights to place on the the figures So to get that right is actually only possible for some countries But what what I know if I've seen some people say I'm gonna assume no international migration from rural areas Absolutely, not true. It turns out that international migration is very often at least Originating from rural areas and so international migration can really have an impact on on agriculture is the point of this this figure Okay, the third thing so okay, so now we know hopefully you're convinced Rural urban migration is happening or rural rural rural rural or migration is also happening But rural urban migration is is happening International migration from rural areas is also happening at at fairly large rates So what I want to ask is really what are those? What is what are the effects of migration or increasing migration on the rural economies that migrants are leaving? Okay, so what I'm going to do is first of all I'm going to step back to an issue that Andrea and Julie were just talking about which is the rural urban what I'm going to call the labor productivity gap and There's a very interesting debate going on in the literature right now that has some important policy relevance So I want to cover that in five minutes or something Which is whether the rural urban labor productivity gap, which is this high rostadaro kind of concept Is that due to migrant selectivity? Meaning is it just Individual characteristics of the migrants themselves that drive that gap or is it restrictions of some sort or migration costs that drive that gap Okay, and if it's the two have very different policy implications if you want to generate higher incomes So I want to kind of talk through that for a few minutes And then I want to talk so we'll do that then when I talk about how migration should effects rural economies thinking primarily about agriculture Briefly probably talk very briefly talk about a conceptual framework and then describe some of the evidence in the literature Related to effects of migration on agricultural production various types of investment and then risk coping which gets into the the more of the Lucas and Stark type of Model and I'll hopefully then not have used up all my time So I have a little bit of time to talk about conclusions related to policy although I'm going to try to sprinkle that in throughout Okay, so let's talk a bit about the non the agricultural non agricultural productivity gaps I'm going to start with the cross-country literature actually Gollum, Lagakos in the law put a paper in in QGE in 2014 which originally was a purely cross-country paper looking at the At the difference in returns to agricultural and non agricultural labor they find a ratio of about three unadjusted on average, so When you move from people who are in urban areas or non agricultural labor make about three times what people in agriculture make Even that number drops to about two once you account for hours worked in and human capital But there's a pretty basically what they're saying is that there's a pretty big gap between Returns to agriculture and returns to non agricultural labor And there's actually some similar papers by Maggie McMillan and Danny Rodricks showing essentially the same thing across a larger set of Activities, so these agriculture is always the least renew Remunerative activity, so why are people staying in agriculture? Well young in the QGE a year before Galen Lagakos in a while who actually added a lot of micro data to their paper to get it published Young Argues that this gap can fully be explained by selectivity, so what what do I mean by that? I mean that he argues that it's just characteristics of the migrants and nothing else a lot of those characteristics are probably unobserved In most data sets he uses DHS data, so you can critique him for the fact that he's predicting consumption Rather than actually using consumption And those predictors probably don't explain much more than 20% of the variation in consumption So there's a very easy critique of the paper and what he's showing but But the argument stands that all of the all of it has to do with this risk-taking that you're not measuring Or that people people are more willing to take risks or people are more adventurous or people are have these unobservable traits, maybe not completely unobservable, but unobservable in very large cross-country data sets Similarly, there's a paper that came out this early this summer by Joan Hicks and Ted Miguel and some co-authors which also argues that selectivity can explain the entire gap And they're using long-term panel data from both Kenya and Indonesia to make that argument And so there they once they put individual fixed effects and and year fixed effects into their model They may be over explaining the data or overfitting the data, which is a potential problem with that that model But they also think that that selectivity may explain the entire gap between Agricultural and non-agricultural labor. Okay, so what is what does that mean for policy? Well, it means that you if you wanted to encourage Well, if you didn't want to encourage migration, you're probably fine But if you want to encourage migration, you need to think about how to encourage the those unobservable traits developing those unobservable traits in people or D-risking the migration for people who would need would need to move Okay, on the other hand There's another this is a structural paper by by grud brian and Melanie Morton Also working paper, although I think it might be a rise and resubmit That shows in Indonesia migration costs play an unimportant role in explaining the wage gap So they don't selectivity explains about a little more than half and the rest of it has to do with migration Quote-unquote costs and here is this what I mean by costs is Literally costs, but then you know the psychic costs of migrating or thinking about migrating Or it could be transportation. It could be like not knowing about the job And there's a lot of evidence from you know from China the 50% of people know actually Know a family member in the city that they go to before they migrate So we know that there's a lot that there are ways of reducing those costs to improve those those livelihoods so the so what I want to conclude here is that Selectivity probably plays a bigger role than we might have otherwise thought in explaining that to number that double that that non-agriculture being double as as remunerative as as agriculture But there may there's probably a play a role for these migration costs as well And and it probably varies quite a bit from from place to place Okay, so then so we know that that exists and we can think about policies to address that So how does migration potentially affect agriculture or non-farm rural activities? Well, when I'm when a migrant is sent out There's a loss of potential labor to work on your household farm. So I'm I'm a micro thinker I'm always thinking about micro data. So, you know, apologize. That's my bias. I'm gonna lay it out there right away So I'm thinking about, you know a migrant leaving the farm and all of a sudden you've got one less farm worker now in data I've collected in Senegal in the last couple of years That might not be a big deal because the average household size in our experiment was was 16 and a half in that data Which is actually what I presented here three months ago two months ago In this very room If it's if you're talking about China where you've got four laborers in the household at maximum now That's a much bigger change in the potential labor availability to your household So that's gonna be very context-specific very household-specific what what that means The migrant may also send back remittances which can be invested in some way, right? So those you could consume those remittances And then there are a bunch of different types of investment that you could make so I'm gonna take you through a literature on on the investment and furthermore agriculture is agricultural production is really uncertain and One of the you know one of the more and perigal regularities that we've seen is that migration is is a Strategy to deal with that risk. It's essentially a way of it's a method of using informal insurance So you send a migrant away and and you know that the covariance between your income and the migrant income is Gonna be much lower than if they work locally in some in some sort of you know in some self employment or something like that because the the returns to your labor in the rural area are all going to be highly correlated and and related to the to fluctuations in the In the the rural economy That said you know some there are some countries that are so rural that That may not hold. I'm thinking specifically of Mozambique where I've been working for a number of years and One of the things that that actually just a quick anecdote. I was working on a mobile money project with Vodacom in Mozambique and my My survey workers had told me if you want to buy anything in Mozambique you buy it in February Well, why February because the rainy season is about November to March and everybody spends all their money at Christmas And then in February nobody has money and this is true in Maputo. They he said as well And I'm relaying this story to the the head of mobile money for Vodacom as they're they're rolling out in PASA in In Mozambique he says oh, yeah, I see that in the data He's he says well, yeah, I can see you know Nobody's got any cash and in February because nobody's trans making any any Nobody's making any any Transactions in February relative to other months when people have money So you can even see it in you know in these really rural economies it comes through in a lot of different places Okay, so the theory is we need to figure out if there is this lost labor effect This is where you get empirical, right? So if we know that this lost labor effect could be there It could be that people make adjustments to deal with the loss of the labor You can change the composition of the family labor force working in agriculture So you can neglect the kids a bit more for instance is one thing to do And and the people who are left behind can work there you can hire labor we know about problems with You know from theory again and some empirical work of the problems with monitoring agricultural labor Agriculture is spatially dispersed. So it's it's more difficult to monitor laborers. You can make capital Investments or rent capital as well to replace that labor. So it could be you do one of all these things Migration could also lead to investments. It could be productive. It could be on the farm But if if returns on the farm are low, we might not see those those farm investments We might see non-farm investments instead, right? So because the expected returns to those investments are higher. It could also be in durables You just want to you know, if you think about it buying a TV is like if you're in one or a refrigerator in one of these rural areas assuming you have electricity it might be a much more valuable Way to use the remittances for yourself Because you get a stream of consumption essentially from that television or that refrigerator that you wouldn't have gotten otherwise And third you could make longer-term human capital investments and there I'm thinking both of education and young Investments in nutrition of young children. So then third I want to talk a bit about the way that that households deal with risk Although I'm probably going over right now Okay, so Are there is there any evidence of lost labor effects in agriculture in general? This is of course a problem you guys have heard it probably a nauseam over the past couple days about the endogeneity of migration So I'm not going to go too much into that. There's not much convincing evidence in the literature There are a lot of papers in China Outside of China. I've written a paper on Vietnam. I wrote northern Vietnam on the slide. I'm pretty sure it's just Vietnam That shows some suggestive evidence of a shift from labor-intensive to land-intensive crops and Agnes Kassumbing and Scott McNiven found a null result in the Philippines using a small panel The interesting thing about their panel is that it's a 20-year panel rather than I think maybe even be a little longer than that but they were looking at people who had left households that had been studied initially by Either Erie or Ifprey in the 1980s and were tracking households and found really nothing no effects on the agricultural production of Migration in general. I like to go to this this graph I'm gonna spend a little bit of time on this slide because I think I'm gonna take three different data sets from China Try to convince you that you know if there was a lost labor effect We might find it here the first graph is from the China Health and Nutrition Survey where they've asked a Really kind of poorly designed set of questions on agricultural labor, but they've used those same poorly designed questions Over a long period of time. So since actually 1991 And I'm showing you data from 1993 to 2009 The survey's been sporadically Done when they were able to find funding So what what this shows is that if you look at these are averages at the household level So they the households in 1993 reported spending about 2,700 hours a year in total on their farms By 2009 that average was down to 1400 Okay, so it's almost they've almost cut the hours that they report working on their farm in half Some of that might be that you used to go stand in your field and talk to your neighbor because you really had nothing else to do in 1993 but I Since the questions have been asked the same way over a long period of time I don't think that that bias quote-unquote bias is gonna change this whole figure The other thing is to say is that this is a conditional figure So this is conditional on reporting any farm work done. So this the line the orange line there Is the percent of households that say they do any farming at all and that has changed From about 90-ish percent to a little bit under 70 percent over that same period of time And these are I've taken the part of the CH&S is an urban and rural survey. This is just the rural villages I'm down to five minutes. Okay The the same thing that what I want to next stress is that plot level productivity gains So this this is from a regression. I've just I'm just showing you the time dummy from a totally different survey This is a panel where we can't quite link that plots We can link households and this is just looking at the main grain in each village So we dummy that out with a village fixed effect and we see that crop productivity went up by 25 to 30 percent depending upon if you're looking at All counties or poor counties during a time of substantial migration. So we're seeing productivity levels actually go go up quite a bit Okay Thinking about investments investments from product production can occur They're inherently risky So you might want to invest in durables or housing another investment is schooling. That's complicated and of course statistical identification is an issue So thinking about investments in production, there's quite a bit of information of of Evidence that we see long-term migrant networks. This is in the international literature That leads to higher investments in micro enterprises in Mexico That's by Woodruff and Zinno and Dean Yang used exchange rate shocks in the Philippines and finds An impact on self-employment and entry into new types of entrepreneurship in the Philippines That said the The randomized experiment the natural experiment that Gibson Mackenzie and still menus Shows a neg shows negative effects on agriculture and livestock in the short term from emigration to New Zealand from Tonga and last piece of data John Giles and I have a paper that shows positive impacts to productive investments among well relatively well off Households in China, but we're using a village level migration variable and the poor households are the ones that are more likely to migrate So this is likely a general equilibrium effect in which There is more money coming into the village and those richer households are then able to make more productive investments Those aren't necessarily agricultural and but actually they're not in agricultural investments. What's more more Common to find our potentially safer investments and and those are investments in housing You know silly as a very nice paper showing which is a matched Survey of Nigerian immigrants in the US and their households which shows The development of casas de la mesas or or migrant houses Remittance houses as they're called in Spanish all over Latin America You can find pictures like that one all over the internet if you look for casas de la mesas We find that that's a major source of what that's what Chinese investment Chinese Households are doing if they're not investing in in Consum if they're not eating the remittances There's a nice paper also that I that I found in trying to find more information more papers that that show migrant migration and housing linkages This is a paper in the anthropological literature Which argues that Pakistani migrants in Norway actually invest in in housing to have a little piece of Norway back in Pakistan when they go home And and she's done qualitative interviews to show that Okay, I'm gonna skip Schooling and go straight to risk actually schooling and young child nutrition There's an old idea in the literature that migration is advantageous to rural households because of that covariance of income and There's a nice experiment by Brian Chattery and Mabarek Which shows that which argues essentially that poor potential migrants may not leave due to risk at the destination There were they they don't leave during the hunger season in in In Bangladesh and Northwest Bangladesh they give them money for a bus ticket and Are able to Convince the randomized giving bus bus ticket money and those villages that got bus ticket money are still migrating at higher Seasonally migrating at higher rates than the other ones Now this this relationship can be complicated because we do a lot with policy to try to deal with insurance risk and in particular I Want to talk a little bit about them and a program like the n raga or the mn raga depending upon how what you want to Call it in India, which is essentially a guaranteed work fair program in in India there's a similar one in Ethiopia the PSNP and What what Melanie shows is that? There's quite a bit of seasonal migration actually in India India tends to have seasonal migration rather than then permanent migration And seasonal migration affects the risk sharing that takes place in the community So when there's more migration due to the covariate risks households have less need for actually for actual insurance and Then she finds evidence consistent with this idea so it turns out that when you bring in Mn raga it reduces the amount of migration that is taking place which reduces the amount of Insurance that households have Okay, I'm out of time. So just to summarize We've we're talking a lot in the world about pump policies to hinder migration right now that may also hinder Increases in returns to labor on average because those in returns are just higher outside of agriculture so we should think about how we Design policies to realize migration is happening rather than trying to hinder it other policies that foster rural investment and say housing or productive investments That we'd like to see that move towards non-farm work because of the the returns And then lastly I want to say that policies seemingly unrelated to migration may have important interactions You may not have the same welfare enhancement from a policy like Mn raga if there's a high migration area Other policies that that change expect invariant returns or variants of returns in agriculture may enter also interact with migration like land tenure reform And we should think about as we think about these types You know these types of issues thinking about things like basic income grants. They're very hot in the policy world Or the development world right now But we should also think about how those basic income income grants will affect migration and how those how migration will affect the results of those Those grants. Thank you