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Do High-Income or Low-Income Immigrants Leave Faster?

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  • Bijwaard, Govert

    ()
    (NIDI - Netherlands Interdisciplinary Demographic Institute)

  • Wahba, Jackline

    ()
    (University of Southampton)

Abstract

We estimate the impact of the income earned in the host country on return migration of labor migrants from developing countries. We use a three-state correlated competing risks model to account for the strong dependence of labor market status and the income earned. Our analysis is based on administrative panel data of recent labor immigrants from developing countries to the Netherlands. The empirical results show that intensities of return migration are U-shaped with respect to migrants' income, implying a higher intensity in low- and high- income groups. Indeed, the lowest-income group has the highest probability of return. We also find that ignoring the interdependence of labor market status and the income earned leads to an overestimating the income effect on departure.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7732.

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Length: 37 pages
Date of creation: Nov 2013
Date of revision:
Publication status: published in: Journal of Development Economics, 2014, 108, 54-68
Handle: RePEc:iza:izadps:dp7732

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Keywords: migration dynamics; labour market transitions; immigrant assimilation; competing risks;

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References

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  1. Govert Bijwaard, 2010. "Immigrant migration dynamics model for The Netherlands," Journal of Population Economics, Springer, vol. 23(4), pages 1213-1247, September.
  2. Borjas, George J, 1989. "Immigrant and Emigrant Earnings: A Longitudinal Study," Economic Inquiry, Western Economic Association International, vol. 27(1), pages 21-37, January.
  3. Nekby, Lena, 2004. "The Emigration of Immigrants, Return vs. Onward Migration: Evidence from Sweden," Research Papers in Economics 2004:7, Stockholm University, Department of Economics.
  4. Thomas, Jonathan M, 1996. "On the Interpretation of Covariate Estimates in Independent Competing-Risks Models," Bulletin of Economic Research, Wiley Blackwell, vol. 48(1), pages 27-39, January.
  5. Bijwaard, Govert, 2009. "Labour Market Status and Migration Dynamics," IZA Discussion Papers 4530, Institute for the Study of Labor (IZA).
  6. Govert E. Bijwaard & Christian Schluter & Jackline Wahba, 2011. "The Impact of Labour Market Dynamics on the Return-Migration of Immigrants," Norface Discussion Paper Series 2011007, Norface Research Programme on Migration, Department of Economics, University College London.
  7. Gibson, John & McKenzie, David, 2009. "The Microeconomic Determinants of Emigration and Return Migration of the Best and Brightest: Evidence from the Pacific," IZA Discussion Papers 3926, Institute for the Study of Labor (IZA).
  8. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, 06.
  9. Borjas, George J & Bratsberg, Bernt, 1996. "Who Leaves? The Outmigration of the Foreign-Born," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 165-76, February.
  10. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  11. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
  12. Constant, Amelie F. & Massey, Douglas S., 2002. "Self-Selection, Earnings, and Out-Migration: A Longitudinal Study of Immigrants to Germany," IZA Discussion Papers 672, Institute for the Study of Labor (IZA).
  13. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  14. Galor, Oded & Stark, Oded, 1991. "The probability of return migration, migrants' work effort, and migrants' performance," Journal of Development Economics, Elsevier, vol. 35(2), pages 399-405, April.
  15. Guillermina Jasso & Mark Rosenzweig, 1982. "Estimating the emigration rates of legal immigrants using administrative and survey data: The 1971 cohort of immigrants to the United States," Demography, Springer, vol. 19(3), pages 279-290, August.
  16. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
  17. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence," CReAM Discussion Paper Series 0702, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  18. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
  19. Dustmann, Christian, 2001. "Return Migration, Wage Differentials, and the Optimal Migration Duration," IZA Discussion Papers 264, Institute for the Study of Labor (IZA).
  20. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-59, November.
  21. Tomi Kyyrä, 2009. "Marginal Effects for Competing Risks Models with Piecewise Constant Hazards," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(4), pages 539-565, 08.
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Citations

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Cited by:
  1. Christian Dustmann & Joseph-Simon Görlach, 2014. "Selective Outmigration and the Estimation of Immigrants' Earnings Profiles," CESifo Working Paper Series 4617, CESifo Group Munich.
  2. Nagore García, Amparo & van Soest, Arthur, 2014. "Unemployment Transitions to Stable and Unstable Jobs Before and During the Crisis," IZA Discussion Papers 8121, Institute for the Study of Labor (IZA).
  3. Govert Bijwaard, 2014. "Multistate event history analysis with frailty," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(58), pages 1591-1620, May.

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