selection of emigrants. This suggests that a reasonable upper bound on ( 1 + δ _n_ )( 1 + δ _s_ ) for a non-English-speaking country close to the United States is 1.5.

These results for US states accord well with domestic rural-urban wage gaps for observably identical workers within all 43 developing countries we study. The coefficient on the “rural” dummy in the pooled regressions of Section 3.2 is approximately –0.3. This suggests that the average ratio of an urban worker’s wages to those of an otherwise observably identical rural worker is about 1.4 across all these countries on average. Such a wedge reflects the combined effect of natural barriers and selection ( 1 + δ _n_ )( 1 + δ _s_ ) . In spatially integrated labor markets, movement itself places bounds on how high this wedge can rise.

There is another, less-studied case of a developing country facing no migration barrier from the US. Since 1986, any citizen of the Federated States of Micronesia (FSM) can acquire on demand a US work visa of unlimited duration. Akee (2007b) presents linked microdata on 632 individuals who were in FSM at the time of the 1994 census and had migrated to the United States by the time of the Micronesian Immigrant Survey of Hawaii and Guam in 1997. Many people in the sample were self-employed or unemployed prior to migration, and only 92 report wage income before and after migration. Mean annual pre-migration earnings are roughly US$4,000 and mean annual post-migration earnings are roughly US$8,000.<sup>21</sup> Using the PPP deflator of 0.51 for FSM with respect to the US as a whole (Heston, Summers, and Aten (2006)), purchasing power-adjusted wages would be roughly the same before and after migration. But group housing arrangements, food choices, and other strategies allow recently-arrived FSM migrants to live at somewhat less than the typical cost of living for full US citizens, suggesting that the ratio representing their true real wage gain to migration is likely to be in the range of 1.1 to 1.4. Note that in this case the same individuals are being followed across the border, so selection bias δ _s_ = 0 .

In other words, the FSM and US labor markets are moderately well-integrated in wage terms, and δ _n_ is likely to be in the range of 0.1 to 0.4. The sample is quite small so this estimate cannot be treated as exact, but it has the advantage of being entirely free of selection effects and therefore a pure estimate of natural barriers aside from those related to language differences. It suggests that for a middle-income developing country whose official language is English, δ _n_ can be low despite substantial transportation costs.

Prior to 1917, Italians faced only minimal legal restrictions to enter and work in the US. Hatton and Williamson (2005) pp. 53-55 show that in the period 1880-1900, real unskilled urban wages were roughly 2.5 times larger in the United States than in Italy, a disequilibrium phenomenon that helped to spark an enormous emigration of Italians as the real cost of transportation plummeted. Roughly 25% of the population departed between 1870 and 1920. Before major legal barriers to Italian and other immigration

> 21 Wage and price information in personal communication from the author. These data only capture a relatively short window of experience in the destination (less than two years) and wages may increase over a longer time period.

27