Relative Attraction of Cities and Inter-City Migration – An Analysis Using the Gravity Setup
Relative Attraction of Cities and Inter-City Migration – An Analysis Using the Gravity Setup

Summary/Abstract: The study provides both descriptive as well as regression analysis explaining the relative dominance of one city (urban area) over another to attract migrants from other cities. The empirical analysis reveals that the relative size of the informal sector in a city and the magnitude of the flow of foreign direct investment towards these cities foster in-migration. Empirical assessment is based on two estimation techniques, the Generalised Method of Moments (GMM) and Tobit regression analysis. The techniques examine migration patterns across 14 major cities focusing over a time period of 7 years (2005-2006 to 2012-2013). It is found that the labour market variables (expected wages, employment, and unemployment rate) and regional economic contribution have a strong significant influence on inter-city migration flows. Distance, as suggested by the gravity model, and years of education, reflecting human capital, have a significant positive impact on migration flows across urban-urban (cities) regions. Further positive and negative amenities attached to the region significantly influence migration flows towards these areas, supporting theories of location. Migration is an equilibrating response to existing disparities and disequilibrium among regions and across cities. The concentration of economic activities generates employment opportunities, which are a strong driver of migration and development of the region. The study proposed that the government should opt for horizontal urbanisation rather than vertical urbanisation pattern. Hence, if the government wants to target the development of various regions, it should divert economic activities towards the targeted region and cities.

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