Migration and the Economy
Internal Migration: Moving from Village to City
Why most of the world's migrants never cross a border, and how moving from farms to cities has driven economic growth.
When people picture a migrant, they often imagine someone crossing an ocean. In fact, internal migration, meaning movement within a country’s own borders, is far more common than international migration. Much of it flows from rural villages to towns and cities, a process that drives urbanization, the growing share of a population living in urban areas.
The scale of moving within a country
Internal migrants vastly outnumber international ones. India’s 2011 census, for example, counted hundreds of millions of people living somewhere other than their place of birth, though many of those moves were short distances, and a large share were women moving after marriage. China saw one of the largest migrations in human history as tens of millions of rural workers moved to coastal factory cities from the 1980s onward. Across the world, the share of people living in cities has risen from roughly one third in 1950 to more than half today.
Why cities pull workers in
The economic engine behind rural-to-urban migration is a productivity gap. In many lower-income countries, a large share of workers are in farming, but farming produces a much smaller share of total output. That means the average farm worker produces less, and earns less, than the average worker in manufacturing or services. When a worker moves from a small farm to a factory, a construction site, or an office, the economy as a whole often produces more. Economists call this long-run shift out of agriculture and into industry and services structural transformation, and it has been part of almost every country’s path from low to middle income.
Picture a family farm where five adult relatives share the work, but four of them could manage the same harvest. The fifth person adds very little extra crop. If that person moves to a city and finds work in a garment factory earning 150 dollars a month, the farm's output barely changes, while a new wage and new production appear in the city. Part of that wage may even be sent back to the village. Multiply that shift across millions of families, and it helps explain why urbanization and economic growth tend to move together.
Barriers to moving, even within a country
Internal migration is not always free and easy. Some countries have rules that tie public services to a person’s official home. China’s household registration system, known as hukou, has historically linked access to schools, health care, and social benefits to where a person was registered, so many rural migrants in cities could not fully use local services. Reforms have eased some of these limits over time. In India, migrants moving between states have sometimes found it hard to use benefits such as subsidized food rations away from home, which reforms like portable ration cards have tried to address. Language differences, housing costs, and informal jobs without contracts are further barriers.
The strains that come with growth
Rapid urbanization brings real challenges. Cities can struggle to build housing, transport, water, and sanitation fast enough, and many newcomers end up in crowded informal settlements. Villages, meanwhile, can lose many of their young adults. These strains are real, but most economists see them as problems to manage through planning and investment rather than reasons to stop movement, since the productivity gains from urbanization are so large.
It is easy to focus on international migration because it gets more attention in the news. But far more people move within their own countries, and those moves have shaped economies at least as much. Leaving internal migration out gives a badly incomplete picture of how people and economies change.
- Internal migration is far more common than international migration.
- Rural-to-urban moves are driven by a productivity gap between farming and other work.
- Structural transformation, the shift from agriculture to industry and services, has accompanied most countries' growth.
- Rules like household registration and non-portable benefits can make internal moves harder.
- Fast urbanization strains housing and services, which calls for planning and investment.
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