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A life-cycle model of outmigration and economic assimilation of immigrants in Germany

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Author Info
Bellemare, C. (Tilburg University, Center for Economic Research)

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Abstract

This paper estimates a structural dynamic life-cycle model of outmigration where, in each period, immigrants choose whether to work in the host country, not to work but remain in the host country, or outmigrate. The model incorporates several features of existing life-cycle theories of outmigration but distinguishes itself by introducing uncertainty in about future earnings and preferences which allows immigrants to revise their duration decisions throughout their migration experience. Because immigrants simultaneously face a migration and a work decision in each period, the economic assimilation rates commonly used to assess the performance of immigrants in the host economy are endogenously determined and estimated, a feature previously ignored in the literature. We overcome the problem of not directly observing outmigration movements by using panel attrition as a proxy variable and use a simple method to correct for the fact that part of the attrition is not a consequence of outmigration. Estimates are used to predict changes in life-cycle patterns of outmigration behavior. Estimation results indicate that outmigration does not depend exclusively on earnings differentials. Estimated assimilation rates are found to be robust to selection effects. Immigrants are found to be forward looking decision makers, and simulations show that predicted migration durations are very sensitive to changes in their economic environment and differ considerably from those of a myopic model.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 29.

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Date of creation: 2004
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Handle: RePEc:dgr:kubcen:200429

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Find related papers by JEL classification:
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis

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  1. Edin, Per-Anders & LaLonde, Robert J. & Åslund, Olof, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Paper Series 2000:13, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  2. Bellemare, Charles, 2004. "Identification and Estimation of Economic Models of Outmigration Using Panel Attrition," IZA Discussion Papers 1065, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Darren Lubotsky, 2000. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Working Papers 824, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  4. Dustmann, Christian & Kirchkamp, Oliver, 2001. "The Optimal Migration Duration and Activity Choice after Re-migration," IZA Discussion Papers 266, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March. [Downloadable!] (restricted)
  6. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 67-92 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  7. Dustmann, Christian, 1994. "Return Intentions of Migrants: Theory and Evidence," CEPR Discussion Papers 906, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. repec:fth:prinin:445 is not listed on IDEAS
  9. Jasso, Guillermina & Rosenzweig, Mark R, 1990. "Self-Selection and the Earnings of Immigrants: Comment," American Economic Review, American Economic Association, vol. 80(1), pages 298-304, March.
  10. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-30, September. [Downloadable!] (restricted)
  11. Jörn-Steffen Pischke & Johannes Velling, 1997. "Employment Effects Of Immigration To Germany: An Analysis Based On Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 594-604, November. [Downloadable!] (restricted)
  12. Pessino, Carola, 1991. "Sequential migration theory and evidence from Peru," Journal of Development Economics, Elsevier, vol. 36(1), pages 55-87, July. [Downloadable!] (restricted)
  13. Thierry Magnac & David Thesmar, 2002. "Identifying Dynamic Discrete Decision Processes," Econometrica, Econometric Society, vol. 70(2), pages 801-816, March. [Downloadable!] (restricted)
  14. Wei-Yin Hu, 2000. "Immigrant Earnings Assimilation: Estimates from Longitudinal Data," American Economic Review, American Economic Association, vol. 90(2), pages 368-372, May. [Downloadable!] (restricted)
  15. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier. [Downloadable!] (restricted)
  16. Guillermina Jasso & Mark Rosensweig & James P. Smith, 2003. "The Earnings of US immigrants," Labor and Demography 0312007, EconWPA. [Downloadable!]
  17. T. Paul Schultz, 1998. "Immigrant quality and assimilation: A review of the US literature," Journal of Population Economics, Springer, vol. 11(2), pages 239-252. [Downloadable!] (restricted)
  18. Zimmermann, Klaus F, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring. [Downloadable!] (restricted)
  19. Cohen, Sarit & Eckstein, Zvi, 2002. "Labor Mobility of Immigrants: Training, Experience, Language and Opportunities," IZA Discussion Papers 519, Institute for the Study of Labor (IZA). [Downloadable!]
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  20. Charles Bellemare, 2004. "Identification and Estimation of the Economic Performance of Outmigrants using Panel Attrition," Cahiers de recherche 0429, CIRPEE. [Downloadable!]
  21. William A. V. Clark & Anita I. Drever, 2001. "Do Immigrants Improve Their Housing Quality When They Move?: Evidence from the German Socio-Economic Panel," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 87-94.
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