Decomposing Migrant Self-Selection: Education, Occupation, and Unobserved Abilities

The authors analyze self-selection and sorting of emigrants from Finland, using full-population administrative data. Their analysis focuses on employed Finnish citizens aged 25 to 54 years, who had no immigrant background. Findings show that emigrants are more educated, have higher earnings, and are more likely to have worked as managers or professionals when compared to those who did not emigrate (the stayers). These findings hold for short-term and long-term emigrants. Emigrant self-selection in terms of residual earnings is U-shaped, which holds when adding occupational controls, as well as when married and unmarried men and women are studied separately. Results also show strong evidence of sorting: Men who emigrate outside Nordic countries are considerably better educated, have higher earnings, and are more likely to have worked as managers or professionals than men who emigrate to other Nordic countries. Also, language is important: Swedish-speaking Finns are much more likely to emigrate to other Nordic countries than Finnish speakers.