Published on People Move

Internal Migration: Opportunities to Speed up the Urbanization Process

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We tend to think of migration in the international context, but a greater scale of migration takes place within a country. China estimates that some 3.6 billion trips will be made during the 40-day period surrounding the Lunar New Year holiday this year. Some are on vacation and business, but most are to return home. Baidu even visualizes this massive internal migration from one place to another on a China map.

People cross provincial boundaries for many reasons – to find jobs, to earn higher incomes, to attain better/higher education or skills, to access hospital and other public services, to join family members, or to escape political instability or violence. Research has shown that, of all these, average wage differences are the most important factor to explain internal migration.

Migrants are not randomly selected. Rather, they tend to be young, more educated, and more driven, and have better family/relative contacts in destinations. Distance appears to matter more for the uneducated than the educated.  

This internal migration can contribute to attain fast economic growth and poverty reduction. Migration, especially rural-urban mobility, helps to improve the efficiency of labor use and rural areas benefit from out-migration through remittances. World Bank (2005) estimates that in China, moving 10 percent of the labor force out of the agriculture sector could result in a 6.4 percent increase in GDP. In Korea, some 45 percent of the population migrated across provincial boundaries, contributing to fast urbanization, concentration of economic activities, and flexible reallocation of labor.

However, this can come at a price, when not managed properly. The presence of ‘irregular migrants’ within the country is a key example. This happens when provincial rules and regulations make it difficult for new comers to obtain residency in the new place. This phenomenon has been widely reported for China –e.g., parents’ not having residency status in a migrated city has forced them to send their children to their hometowns to attend high schools, or migrants’ having no access to basic services. India is no exception. When poor Indians cross provincial borders to find jobs, they often end up working in the informal sector and cannot document their residency or income; as a result they cannot access basic entitlements such as ration cards that allow them to buy food at government shops (fair price shops).

Urban congestion is another price to pay, when the speed of the urban population growth outstrips the capacity of governments to provide basic public services. Studies have also shown that an autonomous expansion of urban employment growth could lead to higher levels of unemployment.

Rapid growth of internal migration can speed up the process of urbanization and expand the boundary of a city, and therefore it plays a critical role in the decision-making process of urban planning. Sending local governments can explore opportunities to improve connectivity with destinations and other major urban areas, create business-conducive environment to create higher income opportunities, and to harness remittances for development. Receiving local governments, on the other hand, can create easier interactions between labor, capital and land, use revenues from active economic activities to invest in public infrastructure in order to accommodate demand from new comers, and conduct necessary fiscal reforms to ensure portability of basic social entitlements – e.g., education, health, housing and pension.


Soonhwa Yi

Senior Economist, Development Economics – Global Indicators Group (DECIG), World Bank

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