COMPARING EARNINGS PROFILES IN URBAN AREAS OF AN LDC - RURAL-TO-URBANMIGRANTS VS NATIVE WORKERS

We use Tanzanian data to test a recently proposed hypothesis that rura l-to-urban migrants have an incentive to supply greater work effort th an native urban workers, because of the migrants' positive probability of returning to the low-wage rural areas. We treat the choice between public- and private-sector employment as endogenous and, for theoreti cal and empirical reasons, distinguish migrants with access to rural l and from those without access. Our results show that migrants in both sectors face lower initial wage offers than native urban workers. But, the wage gap is eliminated within a decade or less, and thereafter, m igrants surpass the wage offers of native workers.