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Trade, Internal Migration, and Human Capital: Who Gains from India’s IT Boom?

Devaki Ghose

The Review of Economics and Statistics2026https://doi.org/10.1162/rest.a.1734preprint
AJG 4ABDC A*
Weight
0.50

Abstract

How do trade shocks affect welfare and inequality when human capital is endogenous? Using India’s IT boom and internal migration data, I document that IT employment and engineering enrollment increased with exports, especially in regions with larger college-age populations. I develop a spatial model featuring higher education choice and differential migration costs for college versus work. The IT boom increased welfare by 2.39%, but without educational mobility, gains would be 25% lower and regional inequality 1.5 times larger. Removing endogenous education further reduces gains by over one-third. Education policies like national scholarships could substantially reduce regional inequality from trade shocks.

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https://doi.org/https://doi.org/10.1162/rest.a.1734

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@article{devaki2026,
  title        = {{Trade, Internal Migration, and Human Capital: Who Gains from India’s IT Boom?}},
  author       = {Devaki Ghose},
  journal      = {The Review of Economics and Statistics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1162/rest.a.1734},
}

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Trade, Internal Migration, and Human Capital: Who Gains from India’s IT Boom?

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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