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The Self Selection of Migrant Workers Revisited

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  • Eran Yashiv

Abstract

Work of low-skilled migrant workers from developing countries in developed economies is a growingphenomenon and a key political and economic issue. An extensive literature has found (for the mostpart) that these workers come from the lower part of the skill distribution. This paper revisits theissue, using a self-selection model, a unique data-set on migrant workers as well as on workers thatchose not to migrate ('stayers'), and direct estimation of the moments of the latent unobserved skilldistributions. The main findings are that there are two dimensions to self-selection: in terms ofobserved skills, a substantial migration premium lures migrant workers, while very low returns toskills in the foreign economy deter skilled workers, leading to negative self-selection. In terms ofunobservable skills, self-selection is found to be positive rather than negative. The latter findingentails substantial increases in mean wages and reduction in wage inequality, relative to randomassignment and to the alternative of not migrating. The analysis also demonstrates that estimates ofskill premia for migrants — an important issue in the immigration literature — are upward biased ifselection is not accounted for. Relevant skills are multi-dimensional, hence assignments in thiscontext are non-hierarchical.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0655.

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Date of creation: Oct 2004
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Handle: RePEc:cep:cepdps:dp0655

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: self-selection; migrant workers; skill premia; migration premium; unobservable skills; non-hierarchical sorting; wage inequality.;

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  9. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
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Cited by:
  1. Jennifer Hunt, 2004. "Are Migrants More Skilled than Non-Migrants?: Repeat, Return and Same-Employer Migrants," Discussion Papers of DIW Berlin 422, DIW Berlin, German Institute for Economic Research.
  2. Milo Bianchi, 2012. "Immigration Policy and Self-Selecting Migrants," Working Papers halshs-00670037, HAL.
  3. Olmo Silva, 2004. "Entrepreneurship: Can the Jack-of-All-Trades Attitude be Aquired?," CEP Discussion Papers dp0665, Centre for Economic Performance, LSE.
  4. Rachel Sabates-Wheeler & Ricardo Sabates & Adriana Castaldo, 2008. "Tackling Poverty-migration Linkages: Evidence from Ghana and Egypt," Social Indicators Research, Springer, vol. 87(2), pages 307-328, June.
  5. Anzelika Zaiceva, 2006. "Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment"," Discussion Papers of DIW Berlin 580, DIW Berlin, German Institute for Economic Research.

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