Between 1967 and 1974, a bilateral treaty increased circular labor migration from Malawi to South Africa by 200%, bringing over 53 million USD in earnings into origin communities. A deadly migrant worker plane crash in 1974 ended these flows and led to migrant repatriation. We study how this shock affected local labor markets. In regions receiving more migrant capital after the crash, workers, particularly women, shifted from farming into non-farm work over thirty years. Investments in non-farm physical and human capital contribute to these sectoral changes. This natural experiment shows that temporary capital inflows can permanently reshape rural labor markets.
Authors
- Acknowledgements & Disclosure
- This is the authors' final version of the paper, which has been accepted for publication at the Review of Economics and Statistics. UK DFID and the IZA funded this work for the benefit of developing countries (GA-C2-RA4-181). Views expressed are those of the authors and not necessarily those of DFID (now FCDO), IZA, or the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w32144
- Published in
- United States of America
