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Rationality of Migration

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Author Info
Tunali, Insan
Abstract

The paradigm of a rational individual acting on the earnings-enhancing benefits of migration is subjected to statistical scrutiny, using data from Turkey. Results with robust selectivity correction support the rationality hypothesis: Both migrants and nonmigrants chose the option in which they had comparative advantage. However, the estimated gain from moving is negative for a substantial portion of migrants, whereas a minority realize very high returns. This suggests that migration is a lottery: Individuals are willing to invest in a proposition that has a high probability of yielding negative returns because of the potential for a very large payoff. Copyright 2000 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Publisher Info
Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 41 (2000)
Issue (Month): 4 (November)
Pages: 893-920
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Handle: RePEc:ier:iecrev:v:41:y:2000:i:4:p:893-920

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  7. Murat G. Kirdar, 2007. "Labor Market Outcomes, Capital Accumulation, and Return Migration: Evidence from Immigrants in Germany," ERC Working Papers 0703, ERC - Economic Research Center, Middle East Technical University, revised Jan 2007. [Downloadable!]
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  9. John C. Ham & Xianghong Li & Patricia B. Reagan, 2004. "Propensity Score Matching, a Distance-Based Measure of Migration, and the Wage Growth of Young Men," Working Papers 2004_3, York University, Department of Economics. [Downloadable!]
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