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Migration, Family, and Risk Diversification

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Author Info
Kong-Pin Chen (Academia Sinica and National Taiwan University, Taiwan)
Shin-Hwang Chiang (York University, Canada)
Siu-Fai Leung (Hong Kong University of Science And Technology, Hong Kong)

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Abstract

This paper proposes a formal model of migration in which workers are heterogeneous and markets are stochastically correlated. We derive and characterize the optimal migration pattern of a family. It is shown to depend on differences in expected earnings, costs of migration, income risks, and more importantly market correlations. We show that migration can take place even when migrants earn less abroad and, more surprisingly, when earnings in the foreign country are riskier for every member of the family. Moreover, it may well be an optimal arrangement to have only dependents migrate, thus rationalizing the recent dependent-oriented migration flows from places like Hong Kong and Taiwan. We also provide some evidence in support of our theory.

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File URL: http://dept.econ.yorku.ca/research/workingPapers/working_papers/migr3.pdf
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File Function: First version, 2002
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Paper provided by York University, Department of Economics in its series Working Papers with number 2002_01.

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Length: 39 pages
Date of creation: Jan 2002
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Handle: RePEc:yca:wpaper:2002_01

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Related research
Keywords: Migration; Emigration; Family; Risk Diversification; Dependents;

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Find related papers by JEL classification:
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
F22 - International Economics - - International Factor Movements and International Business - - - International Migration

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Francesco Daveri & Riccardo Faini, . "Where do migrants go?," Working Papers 124, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  2. Ghatak, Subrata & Levine, Paul & Price, Stephen Wheatley, 1996. " Migration Theories and Evidence: An Assessment," Journal of Economic Surveys, Blackwell Publishing, vol. 10(2), pages 159-98, June.
  3. Katz, Eliakim & Stark, Oded, 1986. "Labor Migration and Risk Aversion in Less Developed Countries," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 134-49, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Richter, Susan M., 2008. "The Insurance Role of Remittances on Household Credit Demand," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6261, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. Maurice Kugler, . "Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia," Borradores de Economia 370, Banco de la Republica de Colombia. [Downloadable!]
    Other versions:
  3. Helena Skyt Nielsen & Michael Svarer, 2006. "Educational Homogamy: Preferences or Opportunities?," IZA Discussion Papers 2271, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Kar, Saibal, 2007. "Migration Taxes and Human Capital Formation: Some Implications for Development," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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