This chapter, titled "The Costs and Returns of Human Migration," by Larry A. Sjaastad, explores the role of migration in addressing income disparities and its effectiveness as an equilibrating mechanism in a changing economy. The author argues that while migration has occurred on a large scale, it has not been sufficient to significantly reduce income differences. The central purpose of the paper is to develop concepts and tools to analyze the costs and returns of migration, both public and private, and to estimate these costs and returns. Sjaastad identifies two broad questions for economists: the direction and magnitude of migrants' responses to labor earnings differentials, and the connection between migration and those earnings. Most studies focus on net migration, finding a relationship between income and migration, but the observed relationship is often weak. The author suggests that gross migration, which includes both inflows and outflows, may be a more useful indicator of the impact of migration on earnings differentials. The chapter breaks down the private costs of migration into money and non-money costs, such as foregone earnings and the psychic costs of changing one's environment. The money costs are estimated to be small compared to the large earnings differentials, while the non-money costs are significant. The psychic costs, which involve no resource cost, affect resource allocation but should not be included as part of the investment in migration. The private returns to migration are examined, including money and non-money components. The money returns are the incremental increase in real earnings, while the non-money returns reflect preferences for familiar surroundings and consumption. The author emphasizes that the age-earnings relation within an occupation is crucial for understanding the returns to migration, especially for older migrants who may need to acquire new skills. The chapter also discusses the divergence between private and social costs and returns, highlighting the impact of externalities and market imperfections. The author concludes that migration should be viewed in the context of complementary investments in human capital, and that understanding these investments is key to explaining observed immobility in the face of large earnings differentials.This chapter, titled "The Costs and Returns of Human Migration," by Larry A. Sjaastad, explores the role of migration in addressing income disparities and its effectiveness as an equilibrating mechanism in a changing economy. The author argues that while migration has occurred on a large scale, it has not been sufficient to significantly reduce income differences. The central purpose of the paper is to develop concepts and tools to analyze the costs and returns of migration, both public and private, and to estimate these costs and returns. Sjaastad identifies two broad questions for economists: the direction and magnitude of migrants' responses to labor earnings differentials, and the connection between migration and those earnings. Most studies focus on net migration, finding a relationship between income and migration, but the observed relationship is often weak. The author suggests that gross migration, which includes both inflows and outflows, may be a more useful indicator of the impact of migration on earnings differentials. The chapter breaks down the private costs of migration into money and non-money costs, such as foregone earnings and the psychic costs of changing one's environment. The money costs are estimated to be small compared to the large earnings differentials, while the non-money costs are significant. The psychic costs, which involve no resource cost, affect resource allocation but should not be included as part of the investment in migration. The private returns to migration are examined, including money and non-money components. The money returns are the incremental increase in real earnings, while the non-money returns reflect preferences for familiar surroundings and consumption. The author emphasizes that the age-earnings relation within an occupation is crucial for understanding the returns to migration, especially for older migrants who may need to acquire new skills. The chapter also discusses the divergence between private and social costs and returns, highlighting the impact of externalities and market imperfections. The author concludes that migration should be viewed in the context of complementary investments in human capital, and that understanding these investments is key to explaining observed immobility in the face of large earnings differentials.