[Samuel Bazzi] Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia
Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia
Samuel Bazzi
Junior Faculty Fellow, Hariri Institute for Computing
Assistant Professor, Department of Economics
Boston University
Abstract: Geographic mobility has been a core feature of the development process throughout history. This paper uses a remarkable policy experiment in modern Indonesia to provide casual evidence on the role of location-specific human capital in shaping the spatial distribution of productivity. Between 1979 and 1988, the Transmigration Program relocated two million voluntary migrants from the rural Inner Islands of Java and Bali to newly created rural settlements in the Out Islands. We develop a novel proxy for skill transferability that measures how similar agroclimatic endowments are between migrants’ origins and destinations. Transmigration villages exhibit significantly higher rice productivity and nighttime light intensity one to two decades later if they were assigned migrants from regions with more similar agroclimatic endowments. We explore several mechanisms for adapting to the agroclimatic change and find relatively more support for adaptation via learning and crop adjustments. Overall, however, our results suggest that regional productivity differences may overstate the potential gains from migration. As a policy exercise, we approximate an optimal reallocation of migrants across settlements on the basis of agroclimatic similarity and find that the program could have achieved 27 percent higher aggregate rice yields.
Bio: Samuel Bazzi is an Assistant Professor in the Department of Economics. He joined BU after receiving his Ph.D. from the University of California, San Diego in 2013. His research spans the field of development economics with recent projects investigating (i) the causes and consequences of labor mobility in the process of development, (ii) the role of access to finance in driving the entry and growth of small firms, and (iii) the dynamic drivers of conflict in ethnically diverse, resource rich settings. Professor Bazzi works with large-scale administrative and survey data, and most of his research is based in the large emerging markets of Brazil and Indonesia.