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Accounting for selectivity and duration-dependent heterogeneity when estimating the impact of emigration on incomes and poverty in sending areas

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  • Gibson, John
  • McKenzie, David
  • Stillman, Steven

Abstract

The impacts of international emigration and remittances on incomes and poverty in sending areas are increasingly studied with household survey data. But comparing households with and without emigrants is complicated by a triple-selectivity problem: first, households self-select into emigration; second, in some emigrant households everyone moves while others leave members behind; and third, some emigrants choose to return to the origin country. Allowing for duration-dependent heterogeneity introduces a fourth form of selectivity -- one must now worry not just about whether households migrate, but also when they do so. This paper clearly sets out these selectivity issues and their implications for existing migration studies, and then addresses them by using survey data designed specifically to take advantage of a randomized lottery that determines which applicants to the over-subscribed Samoan Quota may immigrate to New Zealand. The analysis compares incomes and poverty rates among left behind members in households in Samoa that sent Samoan Quota emigrants with those for members of similar households that were unsuccessful in the lottery. Policy rules control who can accompany the principal migrant, providing an instrument to address the second selectivity problem, while differences among migrants in which year their ballot was selected allow for estimation of duration effects. The authors find that migration reduced poverty among former household members, but they also find suggestive evidence that this effect may be short-lived as both remittances and agricultural income are negatively related to the duration that the migrant has been abroad.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5268.

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Date of creation: 01 Apr 2010
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Handle: RePEc:wbk:wbrwps:5268

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Related research

Keywords: Population Policies; Small Area Estimation Poverty Mapping; Anthropology; Housing&Human Habitats; Remittances;

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Cited by:
  1. Leisa Perch & Rathin Roy, 2010. "Social Policy in the Post-crisis Context of Small Island Developing States: a Synthesis," Working Papers 67, International Policy Centre for Inclusive Growth.
  2. John Gibson & David McKenzie & Bilal Zia, 2012. "The Impact of Financial Literacy Training for Migrants," CReAM Discussion Paper Series 1216, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Baldwin, Kate & Bhavnani, Rikhil R., 2013. "Ancillary experiments: Opportunities and challenges," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. David McKenzie & Hillel Rapoport, 2011. "Can migration reduce educational attainment? Evidence from Mexico," Journal of Population Economics, Springer, vol. 24(4), pages 1331-1358, October.
  5. McKenzie, David & Theoharides, Caroline & Yang, Dean, 2012. "Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks," IZA Discussion Papers 6498, Institute for the Study of Labor (IZA).
  6. Bryan, Gharad & Chowdhury, Shyamal & Mobarak, Ahmed Mushfiq, 2012. "Seasonal Migration and Risk Aversion," CEPR Discussion Papers 8739, C.E.P.R. Discussion Papers.
  7. David McKenzie & Dean Yang, 2010. "Experimental Approaches in Migration Studies," CReAM Discussion Paper Series 1017, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Elisabetta Lodigiani & Sara Salomone, 2012. "Migration-induced Transfers of Norms. The Case of Female Political Empowerment," DEGIT Conference Papers c017_058, DEGIT, Dynamics, Economic Growth, and International Trade.
  9. David McKenzie, 2012. "Learning about migration through experiments," CReAM Discussion Paper Series 1207, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  10. Lu, Yao, 2012. "Household migration, social support, and psychosocial health: The perspective from migrant-sending areas," Social Science & Medicine, Elsevier, vol. 74(2), pages 135-142.
  11. John Gibson & David McKenzie & Halahingano Rohorua, 2013. "Development Impacts of Seasonal and Temporary Migration: A Review of Evidence from the Pacific and Southeast Asia," CReAM Discussion Paper Series 1308, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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