Working Papers

"Rural-Urban Migration and Structural Change: A Reinterpretation" Job Market Paper.
Latest Draft
Abstract. Structural change and rural to urban migration are often seen as a single reallocation process. However, using panel data on Indonesian workers spanning two decades, I present evidence that challenges this standard view. First, I document that workers switch from agriculture to non-agriculture within rural areas, and that most rural-urban migrants are not farmers. Second, I show that aggregate reallocation out of agriculture is primarily driven by the entry of younger cohorts into the labor market, rather than by workers who leave agriculture. Third, I provide evidence that rural-urban migration has intergenerational effects, as the offspring of migrants are less likely to work in agriculture, attain higher levels of education, and earn more. To uncover the forces and frictions giving rise to these patterns of employment reallocation and their aggregate implications, I build an overlapping generations model with two sectors and two locations. In the model, switching sector or location is costly, and access to education differs by location. First, different from the standard view, I find that rural-urban migration has little impact on structural change. While the rural non-agricultural sector is able to absorb most of the workers leaving agriculture, this is detrimental for aggregate growth, as non-agriculture does not develop where it is more productive. Next, I uncover that sectoral switching costs, rather than differences in education, are the main driver of the cohort-level differences in sectoral employment shares. Finally, I show that intergenerational incentives for rural-urban migration are an important driver of urbanization and hence can have a large impact on economic growth.

"Macroeconomic Development, Rural Exodus, and Uneven Industrialization" July 2023 (first version March 2022)
with Josep Pijoan-Mas
Working Paper (CEPR Discussion Paper DP17023, STEG Working Paper WP013) | Slides
We show how internal migrations are a key determinant of the heterogeneous industrialization paths experienced by leading and laggard regions within a country. Focusing on Spain (1940-2000), we find that internal migrations, driven by declining migration costs and diverging sectoral productivities across regions, fully explain the lack of industrialization of its laggard areas, and accelerated growth and structural change at the aggregate level.

Work in Progress

"The Life-Cycle of Firms and the Productivity Advantages of Large Cities"
Slides | Draft available upon request
Using administrative data on Spanish firms, I show that firm growth over the life-cycle is higher in larger cities, while firm entry and exit rates are invariant to city-size. Based on these facts, I build a firm-dynamics model in which firms in big cities may grow larger due to the effects of agglomeration forces on their productivity but also due to their fundamental efficiency. I use the model to decompose firm productivity differences across cities into the effects of agglomeration economies and the sorting of ex-ante more efficient firms. I find that the most efficient firms, motivated by a strong complementarity between their raw efficiency and city-size, sort into large cities, explaining most of the differences in firm productivity across the city-size distribution.