Over half of Bolivian heads of household are lifetime migrants. This paper looks at the long term
impact of internal migration over human development in Bolivia. Three issues frame these
effects. First, twenty five years of rural to urban migration have transformed the demographic
profile of Bolivian society. The new middle third is younger, more bilingual and better educated,
with more access to social services than in the past. The poorest of the poor, however, did not
migrate to the extent of the non-poor. Second, urban workers make approximately four times as
much wages as identical workers in rural areas, controlling for age, ethnicity, and years of
schooling. Two caveats dampen this place premium effect: schooling quality and informal
insurance mechanisms that make migration more costly. Third, increases in human development
can be associated to an “urbanization dividend” that made social services more accessible to first
and second generation migrants over a twenty-five year period. Future increases in human
development, however, are likely to depend on providing quality services and expanding socials
services to the rural poor, rather on gains from urbanization. The key policy challenges of the
future include both an expansion of services to the poorest of the poor in rural areas and breaking
down discrimination barriers against women and indigenous people in urban labor markets