Does Local Development Influence Outmigration Decisions? Evidence from Indonesia

•Phased decentralization is used to establish causality.•Improvement in local development conditions decreases migration across Indonesia.•Outmigration from districts in Java and Bali decreases as local conditions improve.•Outmigration from districts outside Java and Bali is unaffected.•Results are attributed to differences in benefits of migrating across Indonesia. This paper takes advantage of the exogenous phasing of the district-level elections in Indonesia to establish an unbiased causal impact of local economic development conditions on outmigration decisions. Does the change in service delivery due to decentralization affect the internal migration, a phenomenon not new to Indonesia and driven by the historic uneven development across the archipelago? Furthermore, because the services are no longer centered in Java and Bali, will the migration to these historically popular provinces change? If yes, to what extent? This discussion is of central importance not only in the Indonesian context – where rising population pressures in Java and Bali provinces are the government’s ultimate challenge – but also in the development literature, where empirical research on such questions is made impossible by the lack of appropriate data and context. Two different datasets, the Indonesian Family Life Survey and the Indonesian Census, are used to conduct the analyses. They provide consistent results. A household in a district that went through election is 19% less likely to be a migrant-sending household. This is true particularly for districts that are in Java and Bali. A household in a district in Java and Bali that went through election is 27% less likely to be a migrant-sending household.