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The long-term impact of international migration on economic decision-making: Evidence from a migration lottery and lab-in-the-field experiments

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  • Gibson, John
  • McKenzie, David
  • Rohorua, Halahingano
  • Stillman, Steven

Abstract

We study how migrating from a poor country to a rich country affects economic beliefs, preference parameters, and household decision-making efficiency. In a ten-year follow-up survey of applicants to a migration lottery program we elicit risk and time preferences and pro-market beliefs for the migrants and the unsuccessful applicants. The successful and the unsuccessful applicants are each linked to closest relative households, who would stay in the home country if the applicant moved, to play lab-in-the-field games that measure intra-family trust and the efficiency of intra-family decision-making. Despite the large permanent income shock from migrating, there are no significant impacts on risk and time preferences, pro-market beliefs, or decision-making efficiency of transnational households. This stability in the face of such a large and life-changing event lend credence to economic models of migration that treat these determinants of decision-making as time-invariant.

Suggested Citation

  • Gibson, John & McKenzie, David & Rohorua, Halahingano & Stillman, Steven, 2019. "The long-term impact of international migration on economic decision-making: Evidence from a migration lottery and lab-in-the-field experiments," Journal of Development Economics, Elsevier, vol. 138(C), pages 99-115.
    • Handle: RePEc:eee:deveco:v:138:y:2019:i:c:p:99-115
    DOI: 10.1016/j.jdeveco.2018.12.007
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    1. Batista, Catia & McKenzie, David, 2023. "Testing classic theories of migration in the lab," Journal of International Economics, Elsevier, vol. 145(C).
    2. Giambra, Samuele & McKenzie, David, 2021. "Self-employment and migration," World Development, Elsevier, vol. 141(C).
    3. Christian Dustmann & Francesco Fasani & Xin Meng & Luigi Minale, 2023. "Risk Attitudes and Household Migration Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 112-145.
    4. Toman Barsbai & Victoria Licuanan & Andreas Steinmayr & Erwin Tiongson & Dean Yang, 2020. "Information and the Acquisition of Social Network Connections," NBER Working Papers 27346, National Bureau of Economic Research, Inc.
    5. Mckenzie,David J., 2022. "Fears and Tears : Should More People Be Moving within and from Developing Countries, andWhat Stops This Movement ?," Policy Research Working Paper Series 10128, The World Bank.
    6. Toman Barsbai & Victoria Licuanan & Andreas Steinmayr & Erwin Tiongson & Dean Yang, 2021. "Information and Immigrant Settlement," Working Papers 2021-30, Faculty of Economics and Statistics, Universität Innsbruck.
    7. Laurent Bossavie & Çağlar Özden, 2023. "Impacts of Temporary Migration on Development in Origin Countries," The World Bank Research Observer, World Bank, vol. 38(2), pages 249-294.
    8. Li, Baoxi & Cheng, Shixiong & Xiao, De, 2020. "The impacts of environmental pollution and brain drain on income inequality," China Economic Review, Elsevier, vol. 62(C).
    9. Chong Lu, 2022. "The effect of migration on rural residents’ intergenerational subjective social status mobility in China," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 3279-3308, October.
    10. Goldbach, Carina & Schlüter, Achim, 2018. "Risk aversion, time preferences, and out-migration. Experimental evidence from Ghana and Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 132-148.
    11. Sihong Xiong & Ya Wu & Shihai Wu & Fang Chen & Jianzhong Yan, 2020. "Determinants of migration decision-making for rural households: a case study in Chongqing, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1623-1639, November.
    12. Francesco Bripi & Daniela Grieco, 2023. "Participatory incentives," Experimental Economics, Springer;Economic Science Association, vol. 26(4), pages 813-849, September.
    13. Jorge González Chapela, 2022. "Is there a patience premium on migration?," Empirical Economics, Springer, vol. 63(4), pages 2025-2055, October.

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    More about this item

    Keywords

    Economic beliefs; Household efficiency; Migration; Risk preferences; Trust;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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