Is Learning by Migrating to a Megalopolis Really Important? Evidence from Thailand

Abstract

We examine the effects of learning by migrating on the productivity of migrants who move to a "megalopolis" from rural areas using the Thailand Labor Force Survey. The main contribution is to the development a simple framework to test for self-selection on migration decisions and learning by migrating into the urban labor market, focusing on experimental evidence in the observational data. The role of the urban labor market is examined. In conclusion, we find significant evidence for sorting: the self-selection effects test (1) is positive among new entrants from rural areas to the urban labor market; and (2) is negative among new exits that move to rural areas from the urban labor market. Further, estimated effects of learning by migrating into a "megalopolis" have a less significant impact. These results suggest the existence of a natural selection (i.e. survival of the fittest) mechanism in the urban labor market in a developing economy.