IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2021n30.html
   My bibliography  Save this paper

Information, Intermediaries, and International Migration

Author

Listed:
  • Samuel Bazzi

    (UC San Diego, NBER, and CEPR)

  • Lisa Cameron

    (Melbourne Institute: Applied Economic & Social Research, the University of Melbourne)

  • Simone Schaner

    (University of Southern California, NBER)

  • Firman Witoelar

    (Australian National University)

Abstract

Job seekers often face substantial information frictions related to potential job quality. This is especially true in international labor markets, where intermediaries match prospective migrants with employers abroad. We conducted a randomised trial in Indonesia to explore how information about intermediary quality shapes migration choices and outcomes. Information reduces the migration rate, lowering use of low-quality intermediaries. However, workers who migrate receive better pre-departure preparation and have higher-quality job experiences abroad, despite no change in occupation or destination. Information does not change intentions to migrate or beliefs about the return to migration or intermediary quality. Nor does selection explain the improved outcomes for workers who choose to migrate with the information. Together, our findings are consistent with an increase in the option value of search: with better ability to differentiate offer quality, workers become choosier and ultimately have better migration experiences. This offers a new perspective on the importance of information and matching frictions in global labor markets.

Suggested Citation

  • Samuel Bazzi & Lisa Cameron & Simone Schaner & Firman Witoelar, 2021. "Information, Intermediaries, and International Migration," Melbourne Institute Working Paper Series wp2021n30, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2021n30
    as

    Download full text from publisher

    File URL: https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0005/3997508/wp2021n30.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Martin Abel & Rulof Burger & Patrizio Piraino, 2017. "The value of reference letters," Working Papers 06/2017, Stellenbosch University, Department of Economics.
    2. Tahir Andrabi & Jishnu Das & Asim Ijaz Khwaja, 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets," American Economic Review, American Economic Association, vol. 107(6), pages 1535-1563, June.
    3. Yoav Benjamini & Abba M. Krieger & Daniel Yekutieli, 2006. "Adaptive linear step-up procedures that control the false discovery rate," Biometrika, Biometrika Trust, vol. 93(3), pages 491-507, September.
    4. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," Econometrica, Econometric Society, vol. 82(5), pages 1671-1748, September.
    5. Emily A. Beam & David McKenzie & Dean Yang, 2016. "Unilateral Facilitation Does Not Raise International Labor Migration from the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 323-368.
    6. Emmanuelle Auriol & Alice Mesnard, 2016. "Sale of Visas: a Smuggler's Final Song?," Economica, London School of Economics and Political Science, vol. 83(332), pages 646-678, October.
    7. Guido Friebel & Sergei Guriev, 2006. "Smuggling Humans: A Theory of Debt-financed Migration," Journal of the European Economic Association, MIT Press, vol. 4(6), pages 1085-1111, December.
    8. Eliana Carranza & Robert Garlick & Kate Orkin & Neil Rankin, 2020. "Job Search and Hiring with Two-sided Limited Information about Workseekers’ Skills," CSAE Working Paper Series 2020-10, Centre for the Study of African Economies, University of Oxford.
    9. Stefan Wager & Susan Athey, 2018. "Estimation and Inference of Heterogeneous Treatment Effects using Random Forests," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 113(523), pages 1228-1242, July.
    10. Sandip Mitra & Dilip Mookherjee & Maximo Torero & Sujata Visaria, 2018. "Asymmetric Information and Middleman Margins: An Experiment with Indian Potato Farmers," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 1-13, March.
    11. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    12. Thomas J. Kane & Douglas O. Staiger, 2008. "Estimating Teacher Impacts on Student Achievement: An Experimental Evaluation," NBER Working Papers 14607, National Bureau of Economic Research, Inc.
    13. Samuel Bazzi, 2017. "Wealth Heterogeneity and the Income Elasticity of Migration," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 219-255, April.
    14. Burda, Michael C, 1995. "Migration and the Option Value of Waiting," CEPR Discussion Papers 1229, C.E.P.R. Discussion Papers.
    15. Larry A. Sjaastad, 1970. "The Costs and Returns of Human Migration," Palgrave Macmillan Books, in: Harry W. Richardson (ed.), Regional Economics, chapter 9, pages 115-133, Palgrave Macmillan.
    16. Ahn, JaeBin & Khandelwal, Amit K. & Wei, Shang-Jin, 2011. "The role of intermediaries in facilitating trade," Journal of International Economics, Elsevier, vol. 84(1), pages 73-85, May.
    17. David McKenzie & Caroline Theoharides & Dean Yang, 2014. "Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 49-75, April.
    18. Kevin Donovan & Will Jianyu Lu & Todd Schoellman, 2020. "Labor Market Dynamics and Development," Staff Report 596, Federal Reserve Bank of Minneapolis.
    19. J. J. McCall, 1970. "Economics of Information and Job Search," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(1), pages 113-126.
    20. Meyer, Bruce D. & Mittag, Nikolas, 2017. "Misclassification in binary choice models," Journal of Econometrics, Elsevier, vol. 200(2), pages 295-311.
    21. repec:eee:labchp:v:2:y:1986:i:c:p:849-919 is not listed on IDEAS
    22. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," American Economic Review, American Economic Association, vol. 104(9), pages 2593-2632, September.
    23. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    24. Bruce Meyer & Nikolas Mittag, 2013. "Misclassification In Binary Choice Models," Working Papers 13-27, Center for Economic Studies, U.S. Census Bureau.
    25. Burdett, Kenneth & Ondrich, Jan I, 1985. "How Changes in Labor Demand Affect Unemployed Workers," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 1-10, January.
    26. Leemore Dafny & David Dranove, 2008. "Do report cards tell consumers anything they don't already know? The case of Medicare HMOs," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 790-821, September.
    27. McCall, B P & McCall, J J, 1987. "A Sequential Study of Migration and Job Search," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 452-476, October.
    28. Jeffrey R Kling & Jeffrey B Liebman & Lawrence F Katz, 2007. "Experimental Analysis of Neighborhood Effects," Econometrica, Econometric Society, vol. 75(1), pages 83-119, January.
    29. Martin Abel & Rulof Burger & Patrizio Piraino, 2020. "The Value of Reference Letters: Experimental Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 12(3), pages 40-71, July.
    30. Adams, Richard H., Jr. & Cuecuecha, Alfredo, 2010. "The economic impact of international remittances on poverty and household consumption and investment in Indonesia," Policy Research Working Paper Series 5433, The World Bank.
    31. Dovelyn Agunias, 2009. "Guiding the Invisible Hand: Making Migration Intermediaries Work for Development," Human Development Research Papers (2009 to present) HDRP-2009-22, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Apr 2009.
    32. Vittorio Bassi & Aisha Nansamba, 2022. "Screening and Signalling Non-Cognitive Skills: Experimental Evidence from Uganda," The Economic Journal, Royal Economic Society, vol. 132(642), pages 471-511.
    33. Tamura, Yuji, 2010. "Migrant smuggling," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 540-548, August.
    34. John J. Conlon & Laura Pilossoph & Matthew Wiswall & Basit Zafar, 2018. "Labor Market Search With Imperfect Information and Learning," Working Papers 2018-068, Human Capital and Economic Opportunity Working Group.
    35. Girum Abebe & A. Stefano Caria & Esteban Ortiz-Ospina, 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 111(6), pages 1757-1806, June.
    36. Richard, Patrick, 2019. "Residual bootstrap tests in linear models with many regressors," Journal of Econometrics, Elsevier, vol. 208(2), pages 367-394.
    37. Manuela Angelucci, 2015. "Migration and Financial Constraints: Evidence from Mexico," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 224-228, March.
    38. Mattia Makovec & Ririn S Purnamasari & Matteo Sandi & Astrid R Savitri, 2018. "Intended versus unintended consequences of migration restriction policies: evidence from a natural experiment in Indonesia," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 915-950.
    39. Chakravorty, Bhaskar & Arulampalam, Wiji & Bhatiya, Apurav Yash & Imbert, Clement & Rathelot, Roland, 2021. "Can information about jobs improve the effectiveness of vocational training? Experimental evidence from India," CAGE Online Working Paper Series 567, Competitive Advantage in the Global Economy (CAGE).
    40. Ginger Zhe Jin & Phillip Leslie, 2003. "The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 409-451.
    41. repec:hal:spmain:info:hdl:2441/ir3267m2793mq59aqoimcu636 is not listed on IDEAS
    42. Amanda Pallais, 2014. "Inefficient Hiring in Entry-Level Labor Markets," American Economic Review, American Economic Association, vol. 104(11), pages 3565-3599, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Parag Mahajan & Dean Yang, 2020. "Taken by Storm: Hurricanes, Migrant Networks, and US Immigration," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 250-277, April.
    2. Michael A. Clemens & Hannah M. Postel, 2018. "Deterring Emigration with Foreign Aid: An Overview of Evidence from Low‐Income Countries," Population and Development Review, The Population Council, Inc., vol. 44(4), pages 667-693, December.
    3. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    4. Girum Abebe & A Stefano Caria & Marcel Fafchamps & Paolo Falco & Simon Franklin & Simon Quinn, 2021. "Anonymity or Distance? Job Search and Labour Market Exclusion in a Growing African City [Endogenous Stratification in Randomized Experiments]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(3), pages 1279-1310.
    5. Chakravorty, Bhaskar & Arulampalam, Wiji & Bhatiya, Apurav Yash & Imbert, Clement & Rathelot, Roland, 2021. "Can information about jobs improve the effectiveness of vocational training? Experimental evidence from India," CAGE Online Working Paper Series 567, Competitive Advantage in the Global Economy (CAGE).
    6. Friebel, Guido & Manchin, Miriam & Mendola, Mariapia & Prarolo, Giovanni, 2018. "International Migration Intentions and Illegal Costs: Evidence from Africa-to-Europe Smuggling Routes," IZA Discussion Papers 11978, Institute of Labor Economics (IZA).
    7. Jonas Hjort & Vinayak Iyer & Golvine De Rochambeau, 2020. "Informational Barriers to Market Access: Experimental Evidence from Liberian Firms," Sciences Po publications 2020-09, Sciences Po.
    8. Shrestha, Maheshwor, 2019. "Death scares: How potential work-migrants infer mortality rates from migrant deaths," Journal of Development Economics, Elsevier, vol. 141(C).
    9. Joseph-Simon Görlach, 2023. "Borrowing Constraints and the Dynamics of Return and Repeat Migration," Journal of Labor Economics, University of Chicago Press, vol. 41(1), pages 205-243.
    10. Guido, Friebel & Miriam, Manchin & Mariapia, Mendola & Giovanni, Prarolo, 2017. "Human Smuggling and Intentions to Migrate: Global Evidence from a Supply Shock along Africa-to-Europe Migration Routes," Working Papers 375, University of Milano-Bicocca, Department of Economics, revised 06 Dec 2017.
    11. Emmanuelle Auriol & Alice Mesnard, 2016. "Sale of Visas: a Smuggler's Final Song?," Economica, London School of Economics and Political Science, vol. 83(332), pages 646-678, October.
    12. Michael A. Clemens & Timothy N. Ogden, 2020. "Migration and household finances: How a different framing can improve thinking about migration," Development Policy Review, Overseas Development Institute, vol. 38(1), pages 3-27, January.
    13. Rothstein, Jesse & Von Wachter, Till, 2016. "Social Experiments in the Labor Market," Department of Economics, Working Paper Series qt7957p9g6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    14. Beam, Emily A., 2021. "Search costs and the determinants of job search," Labour Economics, Elsevier, vol. 69(C).
    15. Abebe, Girum & Caria, Stefano & Fafchamps, Marcel & Falco, Paolo & Franklin, Simon & Quinn, Simon, 2017. "Anonymity of distance? Job search and labour market exclusion in a growing African city," LSE Research Online Documents on Economics 86573, London School of Economics and Political Science, LSE Library.
    16. Slobodan Djajić, 2017. "Transit migration," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 1017-1045, November.
    17. Elacqua, Gregory & Gómez, Leidy & Krussig, Thomas & Marotta, Luana & Méndez, Carolina & Neilson, Christopher, 2022. "The Potential of Smart Matching Platforms in Teacher Assignment: The Case of Ecuador," IDB Publications (Working Papers) 12483, Inter-American Development Bank.
    18. Livia Alfonsi & Oriana Bandiera & Vittorio Bassi & Robin Burgess & Imran Rasul & Munshi Sulaiman & Anna Vitali, 2020. "Tackling Youth Unemployment: Evidence From a Labor Market Experiment in Uganda," Econometrica, Econometric Society, vol. 88(6), pages 2369-2414, November.
    19. repec:hal:wpspec:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    20. Laurel Wheeler & Robert Garlick & Eric Johnson & Patrick Shaw & Marissa Gargano, 2022. "LinkedIn(to) Job Opportunities: Experimental Evidence from Job Readiness Training," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 101-125, April.
    21. Samuel Bazzi, 2017. "Wealth Heterogeneity and the Income Elasticity of Migration," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 219-255, April.

    More about this item

    Keywords

    International Migration; Information; Middlemen; Quality Disclosure; Search;
    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2021n30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sheri Carnegie (email available below). General contact details of provider: https://edirc.repec.org/data/mimelau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.