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Migration in the Murray-Darling Basin Australia During the Millennium Drought Period

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Migration in the Murray-Darling Basin Australia during the Millennium Drought Period BY ERICK HANSNATA March 2017 THESIS Submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Economics at the University of Canberra Australian Capital Territory, Australia Doctoral Committee: Professor Laurie Brown, Chair Professor Anne Daly Associate Professor Riyana Miranti Abstract The latest prolonged drought or the Millennium Drought period in the Murray-Darling Basin (MDB) highlights several key issues for the people, businesses, and authorities in the Basin. Studies related to the event have mostly focused on water management, environmental issues and policy assessment. However, the direct socio-economic impact during the drought also raises the question of population issues, particularly migration activities. Thus, identifying and understanding patterns of out-migration as well as in-migration into the Basin during the drought in the MDB are essential to fully appreciate the debates on MDB water policies and water for the future. This thesis examines the relationship between migration activities and socio-economic factors, with a particular focus on the environmental shock of the drought. This has not been undertaken before in the literature on the MDB. In order to examine migration in the MDB, the study develops a unique dataset drawing on three different sources to capture migration data, socio-economic indicators and environmental factors. The analysis assessing internal migration by age groups, area classifications, and remoteness index shows that the migration follows the fundamental concept of the gravity model. In the empirical estimation, the key environmental variable of rainfall data is applied indirectly as an instrument for agricultural production, where as an endogenous parameter it affects migration activity. Several econometric tests are also conducted by age group classifications and areas outside the Basin for comparison purposes. Besides highlighting fundamental determinants of migration such as the new classical concept of income differentials, the findings confirm that environmental factors influenced people’s mobility within the period, and the estimation is validated with a strong instrument. i Acknowledgments I would like to express my deepest appreciation to my chair, Professor Laurie Brown, for your endless support to completing my PhD journey. It has been a long winding road for me and your encouragement and wisdom have helped to grow my skills as a researcher. I also would like to extend my sincere gratitude to Professor Anne Daly and Dr. Riyana Miranti for your tremendous support, guidance and continuous advice since the beginning of my study that allowed me to conduct my research and to deal with hardship. My family and I will be forever indebted to you. I also would like to thank my previous committee members, Professor Alan Duncan, Dr. Brenda Dyack, Professor Helen Berry, A/Professor Xiaodong Gong and Dr. Neil Byron for the support and advice, particularly during the early stage of my PhD. Special thanks to my wife, Mayada Hansnata, who at the same time was also pursuing her PhD. Words cannot express my appreciation for your support and Love during our arduous PhD journeys. My children, Aidan Hansnata and Adrien Hansnata, thank you for your understanding during demanding times. You all are my rock and keeping my spirit up. To my parents, Ana Indrawati and M. Nasir and my parents in-laws Sultana Faradz and M. Hussein Gasem, thank you for your continuous words of encouragement and prayers that have sustained and kept me going to see the light at the end of the tunnel. Last but not least, to my sisters and my sister in- laws and brother in-laws, thank you for your prayers and for being all ears. Thank you to my friends and colleagues throughout my PhD journey; Dr. Bimo Wijayanto, Dr. Dewa Wisana, Dr. Adek Muchtar, Dr. Tri Mulyaningsih, Lorna Evans, Adrienne McKenzie - Rebecca Cassells, Annie Abello and all the NATSEM team for the good times we shared and the friendship. You have made this journey more bearable. Finally, thank you to A/Professor Budy P Resosudarmo and Dr. Yogi Vidyattama for being my mentors and for your advices that enabled me to pursue further studies. This thesis would not be possible without funding and the support of the wonderful people from the Collaborative Research Network of Murray-Darling Basin Futures (CRN-MDB futures ) and the Institute for Governance and Policy Analysis (IGPA) at the University of Canberra who have spared their time to support my research. This thesis was edited by Dr. Justine McNamara of Next Version Editing, and editorial intervention was restricted to Standards D and E of the Australian Standards for Editing Practice . Last but not least, thank you to all my bicycles for the companionship of almost 10,000 km during my PhD journey. You “guys” always made my mind clear! ii Table of Contents Abstract .................................................................................................................................... i Acknowledgments ................................................................................................................... ii List Tables and Figures ....................................................................................................... viii List of Abbreviations ............................................................................................................. xi Chapter 1: Migration and Environmental Issues in the Murray-Darling Basin during the Millennium Drought Period .......................................................................... 1 1.1. Overview ........................................................................................................................... 1 1.2.1. Population Change and Indications of Migration in the MDB ................................... 5 1.2.2 Employment and Income Conditions in the Murray-Darling Basin............................ 8 1.2.3. Business and Industry in the Murray-Darling Basin ................................................ 10 1.3. Environmental Problems in the Murray-Darling Basin .................................................. 12 1.3.1. Environmental Events and Weather Anomalies in the MDB ................................... 13 1.4. Research Framework: Literature Gap Related to the MDB ............................................ 17 1.4.1. Research Aims .......................................................................................................... 19 1.4.2. Research Questions................................................................................................... 20 1.5. Methodology: Theoretical Framework and Empirical Analyses .................................... 20 1.6. Thesis Structure ............................................................................................................... 21 1.7. Conclusion ....................................................................................................................... 21 Chapter 2: Literature Review: the Evolution of Migration Theory ...................... 23 2.1. Definition and Brief History of Migration ...................................................................... 23 2.2. The Economics of Migration: Basic Theoretical Framework ......................................... 26 2.2.1. Labour Mobility and the Selectivity Process ............................................................ 26 2.2.2. Human Capital Investment ....................................................................................... 29 2.3. New Classical Approach: Determinants and Impacts of Migration ................................ 31 2.3.1. Labour Market Equilibrium ...................................................................................... 32 2.3.2. Push–Pull Migration Model and Intervening Factors ............................................... 34 2.3.3. Individual Characteristics as Control Variables ....................................................... 36 2.3.4. The Role of Information in Migration ...................................................................... 39 2.3.5. Social Capital and Risk Analysis: Feedback to the New Classical Approach ......... 41 2.4. Global Migration Pattern ................................................................................................. 44 2.4.1. Incentives and Impacts of Global Migration ............................................................ 45 iv 2.5. Migration in Australia ..................................................................................................... 47 2.6. Environmental Migration ................................................................................................ 50 2.6.1. Rapid-Onset Hazard and Slow-Onset Hazard within the Environmental Migration Framework .......................................................................................................................... 51 2.6.2. The Discussion of Environmental Migration based on Empirical Studies ............... 53 2.6.3. Environmental Migration and the Climate Change Issue ......................................... 58 2.6.4. Enhanced Framework and Methods related to Environmental Migration: Research Gap...................................................................................................................................... 61 2.7. Link between the Literature Gap to Migration in the Murray-Darling Basin (MDB) .... 64 Chapter 3: Data
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