Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap

• 成果类型: Article
• 署名作者: Munshi, Kaivan; Rosenzweig, Mark
• 署名单位: University of Cambridge; Yale University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20131365
• 发表日期: 2016
• 页码: 46-98
• 关键词: aggregate productivity; self-selection; credit market; Dual economy; RISK; INFORMATION; TECHNOLOGY; population; INEQUALITY; COMMITMENT

摘要

We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption smoothing, provided by caste-based rural insurance networks, and the income gains from migration. Our theory generates two key empirically verified predictions: (i) males in relatively wealthy households within a caste who benefit less from the redistributive (surplus-maximizing) network will be more likely to migrate, and (ii) males in households facing greater rural income risk (who benefit more from the insurance network) migrate less. Structural estimates show that small improvements in formal insurance decrease the spatial misallocation of labor by substantially increasing migration.