This study investigates the effects of rural-urban migration on economic development in Thailand. It draws upon a panel database of 2,000 rural households collected from 2008 to 2010 in three provinces from Northeast Thailand and a survey of 650 migrants in the Greater Bangkok area conducted in 2010. The study offers some new findings on migration in Thailand. First, there is evidence that there is a need for better social protection for urban migrants. Second, the study shows that migration offers the benefit of income growth for rural households but is less effective in reducing inequality and relative poverty in rural areas. Generally, migrants are more educated albeit at an overall low education level in the rural areas. The message emerging from this paper is that poor rural households tend to produce poor migrants which could be one of the reasons for the continuous existence of a wide rural-urban divide in welfare. The crucial importance of good quality education for migrants to achieve higher quality employment calls for more investment in education quality in rural areas.
JEL classification: O15, O53, I3, J81
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The movement of rural people out of agriculture in order to find jobs in urban centers is a major ingrethent of the development process especially in emerging market economies. Thailand is a particularly good example not only because of its long history of rural-urban migration, high rates of economic growth, and good records of poverty reduction, but also because of its experience with economic and political shocks and a still large share of the population living in rural areas. The country has developed social protection policies for the poor, but empirical evidence on their success is still sparse.
Migration has profound consequences for the rural areas, i.e., the migrants' natal villages. For a household in a rural village, temporary out-migration is a labor-diversification-based livelihood strategy, as migrants send remittances to their natal household. For migrants, the rural household remains the nucleus. Mostly, migrants are still members of the rural household regardless of their duration of absence, frequency of home visits, or place of official registration. However, not all migration decisions lead to the expected success. Sometimes migrants end up in so-called "bad employment" including prostitution and child labor. Policy makers tend to accept these negative externalities as an unavoidable by-product of development with the notion that it is still better to be "poor in the city" than "poor in the village".
The aggregate effect of migration can have strong implications for the institutional and social conditions in the village. When the younger and economically more active population moves out of agriculture a decline in production and productivity can result unless structural change and agricultural modernization is facilitated. Most empirical studies on migration investigate either the impact on urban development or on the rural areas (e.g., Brown and Jimenez 2008, Shen et al. 2010, Goedecke and Waibel 2011). Hence, there is a need for more empirical evidence of the effects of migration on both the rural village and on the prospects of the migrants in their urban environment.
Both aspects are addressed in this paper by asking the following three questions. First, what are the underlying forces that motivate rural households to send some of their members to urban industrial centers for work? Second, what determines the success of such livelihood strategies from the point of view of the rural household and from the point of view from of a migrant? The third question is to what extent the migrant's success of finding quality employment is supportive to the welfare of her natal household.
The empirical basis of this study is a rural household panel database that includes over …