Costs and benefits of rural-urban migration: Evidence from India

This paper provides new evidence on rural-urban migration decisions in developing countries. Using original survey data from rural India, we show that seasonal migrants prefer to earn 35 percent less on local public works rather than incur the cost of migrating. Structural estimates suggest that the fixed cost of migration is small, and can be entirely explained by travel costs and income risk. In contrast, the flow cost of migration is high. We argue that higher living costs in the city explain only a small part of the flow cost of migration and that most of it is non-monetary.