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Financial constraints, migration and inequality

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Author Info
Juliano Junqueira Assunção () (Department of Economics PUC-Rio)
Leandro S. Carvalho (Department of Economics Princeton University)

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Abstract

Although the self-selection of emigrants is determined by di¤erences in the returns to education, according to the celebrated Roy model, empirical evidence suggests that migrants tend to be favorably selected. This paper argues that financial con- straints might be useful to explain this controversy. These constraints might impose positive correlations between (i) wealth and education, and (ii) wealth and migra- tion, implying a positive bias in the empirical results. We also show that high levels of migration premium and return to education in the source country explain the migration of middle-class individuals, a situation in which migration increases in- equality in the home country.

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Publisher Info
Paper provided by Department of Economics PUC-Rio (Brazil) in its series Textos para discussão with number 498.

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Length: 28p. JEL Code: O15, O16, R23
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:rio:texdis:498

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Related research
Keywords: migration; financial constraints; self-selection; human capital;

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  1. 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. [Downloadable!] (restricted)
  2. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-78, September. [Downloadable!] (restricted)
  3. Daniel Chiquiar & Gordon H. Hanson, 2002. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," NBER Working Papers 9242, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Locher, Lilo, 2004. "Immigration from the former Soviet Union to Israel: Who is coming when?," European Economic Review, Elsevier, vol. 48(6), pages 1243-1255, December. [Downloadable!] (restricted)
  5. Borjas, George J, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring. [Downloadable!] (restricted)
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  6. Freeman, Richard B., 1993. "Immigration from poor to wealthy countries : Experience of the United States," European Economic Review, Elsevier, vol. 37(2-3), pages 443-451, April. [Downloadable!] (restricted)
  7. George J. Borjas & Stephen G. Bronars & Stephen J. Trejo, 1992. "Self-Selection and Internal Migration in the United States," NBER Working Papers 4002, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. 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)
  9. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April. [Downloadable!] (restricted)
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  10. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September. [Downloadable!] (restricted)
  11. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  12. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May. [Downloadable!] (restricted)
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