Understanding migration motives and its impact on household welfare: evidence from rural–urban migration in Indonesia

Abstract

Rural–urban migration is a common demographic phenomenon in developing countries. Over the last four decades, Indonesia has had the highest rate of urbanization among Asian countries, which has been driven primarily by rural–urban migration. This type of migration has strong economic and social impacts on individuals at both the origins and the destinations. The study analyses the patterns and impacts of rural–urban migration based on the migration motives of rural households. The difference-in-differences approach is applied to identify migration’s impact on the welfare of migrant households in rural areas based on migration motives. The study uses Indonesian Family Life Survey (IFLS) data from 2007 and 2014, which consists of 2007 household samples spread over 13 provinces. Migration is found to have a positive and significant impact on migrant household welfare based on investment motives, but an insignificant result regarding the impact of migration based on risk-coping motives. Also found is the difference in migration patterns between the two migration motives.