Breaking out of poverty traps: Internal migration and interregional convergence in Russia

We study barriers to labor mobility using panel data on gross region-to-region migration flows in Russia for 1995-2010. We find that barriers that hindered internal migration in 1990s have been generally eliminated by the end of 2000s. In 1990s many poor Russian regions were in poverty traps: potential migrants wanted to leave those regions but could not afford to finance the move. In 2000s (especially in late 2000s), these constraints were no longer binding. Overall economic growth and development of financial markets allowed even the poorest Russian regions to grow out of poverty traps resulting in convergence between Russian regions in 2000s.