In the Pursuit of Windfalls: Internal Migration and Natural Resources in Indonesia

Inggrid, (2015) In the Pursuit of Windfalls: Internal Migration and Natural Resources in Indonesia. In: International Conference on Entrepreneurship, Business and Social Sciences (ICEBSS), 13-08-2015 - 14-08-2015, Yogyakarta - Indonesia.

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Abstract

Internal migration has become an important feature of economic development. However, little research has been done to establish convincing causal effects of natural resource wealth on population mobility. This paper examines how the endowment of oil and gas affects the pattern of internal migration in Indonesia. Our identi fication strategy is to exploit exogenous variation in the possession of the non-renewable resources across Indonesian districts and applies a modi fied dose-response approach to the latest disaggregated census data on recent and lifetime migration. We find that the rate of internal migration is consistently higher in resource-rich districts than their resource-poor counterparts. The results also highlight stronger effects of the natural resource treatment variables on lifetime migration. Interestingly, the plots of the modifi ed dose-response function exhibit an inverted U-shaped, suggesting that mediocre levels of oil-gas abundance are associated with the highest inflow of migrants. Further exercises show that the rural population and the male group are more responsive to the availability of oil and gas.

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