A potential weakness of analyses based on geographical variation is that they fail to take
account of spillovers to areas with low numbers of migrants. Our analyses incorporating
spillovers give mixed results. Adding spatial lags eliminates the relationship between
distance to the Myanmar border and wages, though this is perhaps an unreasonably
difficult test, and, in any cases, the spatial lags model implies that wages are
unexpectedly low along the Myanmar border. Estimating the basic model using provinces
instead of districts has the opposite effect: it raises the point estimate for migrant
intensity, though the new estimate is imprecise.
If Thais were avoiding migrating into areas with concentrations of migrants, this would
mask the labor market effects from immigration by diffusing the labor supply shock.
However, we find no evidence that Thai internal migration has in fact responded to
immigration. At the same time, Thais do appear to have responded to immigration by
slightly reducing their participation in private employment. This suggests that immigrants
compete most directly with private employees. It also suggests that movement between
sectors may have played a role analogous to migration in transmitting labor supply
shocks more widely across the economy.
An important limitation of our data is the extensive, but poorly understood, underreporting
of migrant. If, despite controls for things such as distance to Bangkok and
employment structure, and border dummies, registration rates are still systematically
related to distance to the Myanmar border, then our estimates will be biased.