# **I. Introduction**

<mark>A wide strand of the economic development literature has addressed linkages between the spatial and economic mobility of people. Early theoretical contributions viewed the mobility of labor from the rural to urban sectors – fueled by wage differentials – as the key to growth and development (Lewis 1954), while later models called into question the capacity of urban labor markets to absorb a large influx of lowskilled workers (Harris and Todaro 1970). More recent work, meanwhile, viewed migration decisions through the lens of the sending household, which seeks to diversify its income sources and insure against risk (Stark and Bloom 1985; Rosenzweig and Stark 1989). However, despite the voluminous body of theoretical and empirical work on internal migration in developing countries, a key question of policy</mark> relevance remains: Is moving up the welfare ladder simply a matter of moving out of one’s household?

<mark>We aim to address this question in the context of Uganda, a country characterized by a relatively high degree of spatial mobility. Previous analyses of nationally-representative data revealed that 1 in 10 household heads had migrated in the previous five years (World Bank 2006). Migration patterns are likely tied to the country’s substantial regional and rural-urban wealth disparities, which shape the sets of economic opportunities available to households.</mark><sup>3</sup> <mark>For example, the share of households who primarily rely on subsistence agriculture for their income is particularly high among the bottom 40 percent of the welfare distribution. An analysis of 2002 census data, meanwhile, found that – though rural and urban populations are mobile – most migration events in Uganda occur within the same region and the majority</mark> of migrants into Kampala come from the adjoining Central region (Mukwaya et al. 2012).

<mark>Despite the mobility of its population, most of Uganda’s rural migrants tend to move within their own region or to another rural area, where the returns to moving are likely lower (World Bank 2006). This fact poses a bit of a puzzle against the backdrop of Uganda’s urbanization patterns (de Brauw, Mueller, and Lee 2014). While the bulk of Uganda’s 35 million inhabitants live in rural areas, the country is urbanizing at a considerable pace. According to recent census data, the country’s overall population density grew by 41 percent between 2002 and 2014 and the share of Uganda’s population living in urban areas increased by more than 50 percent (from 12.1 percent to 18.4 percent) over the same period (Uganda Bureau of Statistics 2014). Yet some of this expansion is due to a redefinition of administrative boundaries for urban areas. An alternative measure of urbanization that is comparable across countries, the agglomeration</mark> index, suggests that Uganda’s urban share is even higher – at 25 percent (World Bank 2012).

<mark>While there are some studies that examine migration in Uganda, most rely on cross-sectional data that pose methodological challenges for identification. Moreover, none of these analyses provides causal evidence of the impact of migration on welfare. In this paper, we examine the relationship between spatial and economic mobility in Uganda using data from 2005 through 2012. The paper makes two principal contributions to the literature. First, it contributes to the policy and academic literature on internal migration and structural transformation in developing countries through the use of multiple waves of panel evidence. The use of longitudinal data confers an advantage over cross-sectional analyses which, though more common in the literature, fail to properly account for time-invariant factors that can</mark>

> 3 <mark>While economic considerations lead many of Uganda’s migrants to move, other factors also drive migration decisions. For example, insecurity and conflict, particularly in the North of the country during the 2000s, prompted the displacement and forced migration of large segments of the rural population (Mulumba and Olema 2009). A period of reverse migration then followed, with an influx of displaced residents returning to the North (World Bank 2012).</mark>

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