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International Migration with Heterogeneous Agents: Theory and Evidence for Germany, 1967-2009

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  • Herbert Brücker

    ()
    (University of Bamberg, IAB, Nuernberg, and IZA, Bonn.)

  • Philipp J.H. Schroeder

    (Aarhus School of Business and DIW Berlin.)

Abstract

Temporary migration, though empirically relevant, is often ignored in formal models. This paper proposes a migration model with heterogeneous agents and persistent cross country income differentials that features temporary migration. In equilibrium there exists a positive relation between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, existing empirical migration models, estimating net migration flows, instead of stocks, may be misspecified. This suspicion appears to be confirmed by our investigation of the cointegration relationships of German migration stocks and flows since 1967. We find that (i) panel-unit root tests reject the hypothesis that migration flows and the explanatory variables are integrated of the same order, while migration stocks and the explanatory variables are all I(1) variables, and (ii) the hypothesis of cointegration cannot be rejected for the stock model.

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Bibliographic Info

Paper provided by Norface Research Programme on Migration, Department of Economics, University College London in its series Norface Discussion Paper Series with number 2011027.

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Date of creation: Dec 2011
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Handle: RePEc:nor:wpaper:2011027

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Keywords: International migration; temporary migration; panel cointegration;

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References

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  1. Stefano Fachin, 2005. "Long-Run Trends in Internal Migrations in Italy: a Study in Panel Cointegration with Dependent Units," Econometrics 0507002, EconWPA.
  2. Herbert Brücker & Boriss Siliverstovs, 2006. "On the estimation and forecasting of international migration: how relevant is heterogeneity across countries?," Empirical Economics, Springer, vol. 31(3), pages 735-754, September.
  3. Epstein, Gil S & Hillman, Arye L., 1998. "Herd Effects and Migration," CEPR Discussion Papers 1811, C.E.P.R. Discussion Papers.
  4. Faini, Riccardo & Venturini, Alessandra, 1994. "Migration and Growth: The Experience of Southern Europe," CEPR Discussion Papers 964, C.E.P.R. Discussion Papers.
  5. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
  6. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
  7. Dustmann, Christian & Kirchkamp, Oliver, 2000. "The Optimal Migration Duration and Activity Choice after Re-migration," Sonderforschungsbereich 504 Publications 00-39, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  8. Hatton, Timothy J., 1993. "A Model of UK Emigration, 1870-1913," CEPR Discussion Papers 771, C.E.P.R. Discussion Papers.
  9. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
  10. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
  11. Banerjee, Anindya, et al, 1986. "Exploring Equilibrium Relationships in Econometrics through Static Models: Some Monte Carlo Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 253-77, August.
  12. Hill, John K., 1987. "Immigrant decisions concerning duration of stay and migratory frequency," Journal of Development Economics, Elsevier, vol. 25(1), pages 221-234, February.
  13. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute for the Study of Labor (IZA).
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Cited by:
  1. Simone BERTOLI & Herbert BRÜCKER & Jesús FERNÁNDEZ-HUERTAS MORAGA, 2013. "The European Crisis and Migration to Germany: Expectations and the Diversion of Migration Flows," Working Papers halshs-00913869, HAL.
  2. repec:ebl:ecbull:v:6:y:2006:i:2:p:1-11 is not listed on IDEAS
  3. Herbert Brücker & Boriss Siliverstovs, 2006. "On the estimation and forecasting of international migration: how relevant is heterogeneity across countries?," Empirical Economics, Springer, vol. 31(3), pages 735-754, September.
  4. Timo Baas & Herbert Brücker, 2012. "The macroeconomic consequences of migration diversion: evidence for Germany and the UK," Norface Discussion Paper Series 2012010, Norface Research Programme on Migration, Department of Economics, University College London.
  5. Thierry Baudassé & Rémi Bazillier, 2012. "Gender Inequality and Emigration: Push factor or Selection process?," Working Papers hal-00829526, HAL.

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