How Important Is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration
How much do migrants stand to gain in income from moving across borders? Answering this question is complicated by non-random selection of migrants from the general population, which makes it hard to obtain an appropriate comparison group of non-migrants. New Zealand allows a quota of Tongans to immigrate each year with a random ballot used to choose among the excess number of applicants. A unique survey conducted by the authors allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the ballot, after allowing for the effect of non-compliance among some of those whose names were drawn. We also conducted a survey of individuals who did not apply for the ballot. Comparing this non-applicant group to the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods other than instrumental variables are found to overstate the gains from migration by 20-82%, with difference-in-differences and bias-adjusted matching estimators performing best among the alternatives to instrumental variables. (JEL: J61, F22, C21) (c) 2010 by the European Economic Association.
Volume (Year): 8 (2010)
Issue (Month): 4 (06)
|Contact details of provider:|| Web page: http://www.mitpressjournals.org/jeea|
|Order Information:||Web: http://www.mitpressjournals.org/jeea|
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.:
- Rajeev H. Dehejia & Sadek Wahba, 1998.
"Propensity Score Matching Methods for Non-experimental Causal Studies,"
NBER Working Papers
6829, National Bureau of Economic Research, Inc.
- Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
- Chris Robinson & Nigel Tomes, 1982. "Self-Selection and Interprovincial Migration in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 15(3), pages 474-502, August.
- A. Smith, Jeffrey & E. Todd, Petra, 2005.
"Does matching overcome LaLonde's critique of nonexperimental estimators?,"
Journal of Econometrics,
Elsevier, vol. 125(1-2), pages 305-353.
- Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
- Borjas, George J, 1987.
"Self-Selection and the Earnings of Immigrants,"
American Economic Review,
American Economic Association, vol. 77(4), pages 531-53, September.
- Daniel Chiquiar & Gordon H. Hanson, 2005.
"International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States,"
Journal of Political Economy,
University of Chicago Press, vol. 113(2), pages 239-281, April.
- 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.
- 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.
- David Mckenzie & Hillel Rapoport, 2004. "Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico," Working Papers 2004-3, Bar-Ilan University, Department of Economics.
- Joop Hartog & Rainer Winkelmann, 2003. "Comparing migrants to non-migrants: The case of Dutch migration to New Zealand," Journal of Population Economics, Springer, vol. 16(4), pages 683-705, November.
- Joshua Angrist, 2004.
"Treatment Effect Heterogeneity in Theory and Practice,"
Econometric Society 2004 North American Winter Meetings
186, Econometric Society.
- Joshua D. Angrist, 2004. "Treatment effect heterogeneity in theory and practice," Economic Journal, Royal Economic Society, vol. 114(494), pages C52-C83, 03.
- Angrist, Joshua, 2003. "Treatment Effect Heterogeneity in Theory and Practice," IZA Discussion Papers 851, Institute for the Study of Labor (IZA).
- Joshua D. Angrist, 2003. "Treatment Effect Heterogeneity in Theory and Practice," NBER Working Papers 9708, National Bureau of Economic Research, Inc.
- Guido W. Imbens, 2004.
"Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review,"
The Review of Economics and Statistics,
MIT Press, vol. 86(1), pages 4-29, February.
- Guido W. Imbens, 2003. "Nonparametric Estimation of Average Treatment Effects under Exogeneity: A Review," NBER Technical Working Papers 0294, National Bureau of Economic Research, Inc.
- Dehejia, Rajeev, 2005. "Practical propensity score matching: a reply to Smith and Todd," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 355-364.
- James Heckman & Neil Hohmann & Jeffrey Smith & Michael Khoo, 2000.
"Substitution And Dropout Bias In Social Experiments: A Study Of An Influential Social Experiment,"
The Quarterly Journal of Economics,
MIT Press, vol. 115(2), pages 651-694, May.
- James Heckman & Neil Hohmann & Jeffrey Smith, 1998. "Substitution and Dropout Bias in Social Experiments: A Study of an Influential Social Experiment," UWO Department of Economics Working Papers 9819, University of Western Ontario, Department of Economics.
- Ximena Clark & Timothy J. Hatton & Jeffrey G. Williamson, 2002. "Where Do U.S. Immigrants Come From, and Why?," NBER Working Papers 8998, National Bureau of Economic Research, Inc.
- Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
- J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
- Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
- Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
- Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01.
This item is featured on the following reading lists or Wikipedia pages:
When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:8:y:2010:i:4:p:913-945. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)
If references are entirely missing, you can add them using this form.