Barriers to Labor Migration for the Rural Poor

Migration could be an important anti-poverty measure, allowing unemployed rural poor spatially reallocate to areas where employment opportunities are promising. However, permanent rural-to-urban migration by the poor in developing countries is surprisingly limited. This raises important academic and policy-relevant questions: why do the poor fail to take advantage of these growing opportunities in urban job locations, and what are the barriers to skill migration? We introduce a vocational training "plus" program facilitating apparel sector employment for the poor rural youth in northern Bangladesh, where we relax some of the migration-related constraints in a rigorous Randomized Control Trial (RCT) setting. Data from the follow-up surveys - six and eighteen months after the intervention - show statistically significant, persistent, and large effects of the training program on migration and employment when complemented with stipend and/or paid internship components. Treated participants show substantial income and remittance impacts, especially during the time of a seasonal shock, as well as a reduction in income poverty, both for the stipend and internship treatment arms. Reduction in job search cost and migration nancing are key mechanisms underlying the treatment effects. The benefit-cost ratio for the internship is estimated to be 8.85, indicating that the program can be scaled up cost-effectively.