Saturday, 6 December 2014

Migrating from the big cities for opportunities in smaller towns: The case of Brazil

by Eva Maria Egger 
While most of the literature on internal migration focuses on rapid urbanization and metropolitan cities as destinations filled with opportunities for migrants, little attention has been paid to those people who leave the big cities. Not only do migrants return to their places of origin in rural areas, but  many people decide to leave their place of birth in the metropolitan area to find opportunities in smaller towns. Recently, Christiaensen et al. (2013) have pointed out the importance of smaller towns for the economic development of African countries in contrast to the traditional standard two-sector development model. And considering all the discussions about the issues around urbanization, such as high unemployment, poor housing infrastructure, high crime etc., it should not be surprising that some people also consider leaving these difficult environments.
However, from an economic perspective, one of the main drivers for internal migration is the seeking of higher wages. As wages are on average much higher in metropolitan areas, leaving these areas comes at the cost of a wage loss. Despite this, Brazil’s 2010 census, the most recent demographic data, shows that net-migration into metropolitan cities[1] is negative for working-age male migrants. Between 2009 and 2010, 20% of all working age male migrants within Brazil moved out of metropolitan micro-regions to non-metropolitan micro-regions with on average less than 500,000 inhabitants. During the same period, only around 15% moved in the opposite direction. These urban out-migrants actually change jobs and are not just reflecting suburbanisation by commuters. Also, the migrants are a diverse group: a third of them have attained only primary education, while around 18% are college graduates.

Therefore, in my research I aim to use econometric methods to estimate which factors make  smaller towns more attractive compared to metropolitan cities, if not wages. My findings suggest, that one of the main economic drivers is the much lower living costs in smaller towns, such that migrants on average do not experience a wage loss in real terms. They prefer towns with growing economic opportunities rather than very small and remote areas. In terms of non-economic factors, the migrants appear to value the quality of provision of education. These findings indicate that the investments of the Brazilian government during the recent years into infrastructure development of smaller towns and former less developed and more remote regions is bearing fruit. As more and more Brazilians are attracted to these locations they contribute to a reduction in regional inequality. Thus it could be worth widening the focus of our migration research to include these destinations outside of metropolitan agglomerations and for policy makers, too, to acknowledge the potential of smaller towns.

Christiaensen, L., J. De Weerdt and Y. Todo (2013), Urbanization and poverty reduction: the role of rural diversification and secondary towns, Agricultural Economics, 44, 435-447.

Eva Maria Egger is a doctoral candidate in Economics at the University of Sussex, funded by the Migrating out of Poverty Research Programme Consortium.

[1] Metropolitan areas are microregions with one million or more inhabitants. This definition follows the United Nations’ World Urbanization Prospects (UNWUP, (Christaensen et al. 2013).