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Crossing the Border: Self-selection, Earnings and Individual Migration Decisions

Author

Listed:
  • Simone Bertoli

    (Institute for Employment Research)

  • Jesus Fernandez-Huertas Moraga

    (Institute for Economic Analysis, CSIC)

  • Francesc Ortega

    (Universitat Pompeu Fabra)

Abstract

Many empirical studies on the determinants of international migration flows rely exclusively on macro data, and do not account for migrants' self-selection. We analyze a very interesting episode in international migration for which we are able to gather individual-level data covering all relevant countries, namely the exodus of Ecuadorians to Spain and the US in the aftermath of the economic collapse of 1999. Specifically, we produce selectioncorrected predictions of counterfactual individual earnings and use them to estimate a discrete-choice migration equation that allows for correlated errors across destinations and a rich structure of migration costs. We find that earnings significantly shape individual migration decisions, even in an episode in which Ecuadorians mostly chose Spain where earnings were lower than in the US, and they contribute to explaining the observed composition of migration flows. Moreover, our estimates show that changes in earnings at a particular destination have a larger effect on destination choice conditional on migration than on the scale of migration.

Suggested Citation

  • Simone Bertoli & Jesus Fernandez-Huertas Moraga & Francesc Ortega, 2010. "Crossing the Border: Self-selection, Earnings and Individual Migration Decisions," RF Berlin - CReAM Discussion Paper Series 1011, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    • Handle: RePEc:crm:wpaper:1011
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    More about this item

    Keywords

    international migration; self-selection; earnings; individual-level data;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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