Migration and Human Capital in Brazil during the 1990s

Abstract

Nearly 40 percent of all Brazilians have migrated at one point and time, and in-migrants represent substantial portions of regional populations. Migration in Brazil has historically been a mechanism for adjustment to disequilibria. Poorer regions and those with fewer economic opportunities have traditionally sent migrants to more prosperous regions. As such, the southeast region, where economic conditions are most favorable, has historically received migrants from the northeast region. Migration should have benefited both regions. The southeast benefits by importing skilled and unskilled labor that makes local capital more productive. The northeast can benefit from upward pressures on wages and through remittances that migrant households return to their region of origin. The northeast of Brazil is a net sender of migrants to the southeast. In recent years a large number of people moved from the southeast to the northeast. Compared with northeast to southeast (NE-SE) migrants, southeast to northeast (SE-NE) migrants are less homogeneous regarding age, wage, and income. SE-NE migrants are on average poorer and less educated than the southeast average, while NE-SE migrants are financially better off and higher educated than the northeast average. The authors find that the predicted returns to migration are increasing with education for SE-NE migrants and decreasing for NE-SE migrants. They further observe that the returns to migration have been decreasing for NE-SE migrants and increasing for SE-NE migrants between 1995 and 1999. This finding helps explain migration dynamics in Brazil. While the predicted positive returns to migration for NE-SE migrants indicate that NE-SE migration follows in general the human capital approach to migration, the estimated lower returns to migration for SE-NE may indicate that nonmonetary factors also play a role in SE-NE migration.