The Winner Takes It All: Internal Migration, Human Capital and Wages in Ethiopia

Niels-Hugo Blunch, Washington and Lee University
Caterina Laderchi, World Bank Group

Previous studies of migration have mainly examined international migration. Yet, internal migration is an important issue, especially in Sub-Saharan Africa. Using a recent nationally representative household survey, this paper examines internal migration in Ethiopia, focusing at the linkages among internal migration, human capital and wages. The results suggest that not only are migrants better educated and obtain higher wages than non-migrants, controlling for other factors (including human capital), they also obtain higher returns to their human capital. In other words, the more educated reap higher returns both from benefiting from migration and from higher returns to their human capital than non-migrants and from being better educated to begin with—that is, “the winner takes it all.” This result should be of concern to policy makers in Ethiopia, since individuals with low levels of human capital already is a vulnerable group, and the study therefore also discusses the policy implications of these results.