The Impact of Internal Migration on Local Labour Markets in Thailand

We estimate the impact of internal migration on local labour markets in Thailand.Using an instrumental variable approach based on weather and distance we estimate an exogenous measure of the net migration in ow into each region. Our results show that instrumenting for the possible endogeneity of net inward migration is crucial to the analysis. The results suggest substantial adjustments in hours worked and weekly wages in response to short term changes in labour supply for low skilled males. We find no effect on high skilled workers. A theoretical section shows that a reduction in hours per worker in response to an increase in inward migration is consistent with the predictions of a standard search model.