# **5. An Empirical Illustration**

The Kagera Health and Development Survey (KHDS) provides an ideal opportunity to bring the model to the data and to begin to explore the empirical relevance of its insights. Under the KHDS, 915 households, sampled to be representative of (rural and urban) Kagera, a region in the northwestern part of Tanzania, were first interviewed up to four times during 1991-1994. In 2010, the survey attempted to trace and re-interview all 6,353 original household members, even if they had migrated or split off from the original household. By 2010 the original sample respondents had spread across Tanzania’s rural areas, towns and cities. This unique data set is one of the longest-running panel data sets of individuals in Africa. By 2010, 68 percent (4,336) of the original household members were interviewed, 20 percent had died (1,275) and 12 percent were untraced (739). Of the 4,336 respondents, comparable consumption data are available for 4,323. With at least one person contacted in 92 percent of the initial households and only 12 percent of individuals not found, survey attrition rates were extremely low, especially considering the long time period of 20 years.

From the sample of 4,323 individuals, we drop 313 who were already living in an urban area in 1991/94, leaving 4,010 individuals who originate from rural Kagera. Of those, 1,899 migrated out of their original villages. Twenty years later, in 2010, we find 315 of these individuals had migrated to a city, 557 individuals to a town and 1,027 individuals to another rural area.<sup>6</sup> Of the 2,111 individuals who did not move, 331 live in an area that got reclassified from rural to urban and we drop them from our analysis to avoid confusion. Virtually everyone in the rural areas is in the informal sector (only 3.5 percent rely on a formal wage job), so this group corresponds closely to the rural population we have in mind in the model. In the towns, 18.9 percent live in a household that relies on formal wage employment. This rises to 22.2 percent in the cities.<sup>7</sup> The 2010 income distribution of these individuals could essentially be thought of as the migration equilibrium outcome of the rural population of Kagera in 1991 across the 3 destinations, the rural area (i.e. no migration or another rural area), the secondary towns and the cities and across the informal and formal sectors within the two latter destinations.<sup>8</sup> It provides an ideal backdrop to give empirical content to the findings of the model under the different scenarios considered (as summarized in Table 1) and explore the model’s empirical relevance.

> 6 We distinguish between urban and rural centers using the 2002 census classification. Urban centers with more than 500,000 inhabitants are considered cities, the others are towns. Using this definition, the cities are Dar es Salaam (the economic capital of Tanzania with an estimated 4.36 million people according to the 2012 census) and Mwanza (with an estimated 0.7 million inhabitants)

> 7 Of the formally wage employed, 70 and 80 percent work in the private sector in towns and cities, respectively. In towns, 21 percent also work in the public sector, while that share is 11 percent in the cities. The remaining 7 percent work for NGOs or religious organizations, in both the towns and the city.

> 8 Intrahousehold decision making is abstracted from.