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In most developing countries, households in lagging areas earn much lower returns to their attributes compared with similar households in leading areas. This paper compare returns differences between an integrated region that houses main growth centers and a less integrated region which remains cutoff from these centers by large rivers. We find that higher mobility costs resulting from lack of connectivity to growth centers reduces returns for all households in less integrated regions. The magnitude of reduction is larger for the poorer households. Within a region, migration between geographically contiguous rural and urban areas equalizes returns for the poorer households.
Published Online: 2011-8-31
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
