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Easy Come, Easy Go? Economic Shocks, Labor Migration and the Family Left Behind

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  • André Gröger

Abstract

This article investigates the impact of negative income shocks in migrant destination countries around the world on the domestic and international labor migration decisions of their family members left behind at origin. Exploiting differences in labor market shocks across and within destinations during the Great Recession, I find large and heterogeneous effects on both types of migration decisions. High remittance-dependent households reduced domestic and increased international labor migration in response to the shock. Low dependence ones remained largely unaffected. I provide a theoretical framework, which rationalizes this heterogeneity by the relative magnitudes of income and substitution effects caused by the shock. The results imply a deterioration in the skill selection of aggregate international migrant flows as high dependence households had below average skill levels. New international migrants targeted the same destinations as established ones from the same household, providing evidence of strong kinship migration networks. The results show that domestic and foreign migration decisions are interrelated and jointly determine aggregate migration flows.

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  • André Gröger, 2019. "Easy Come, Easy Go? Economic Shocks, Labor Migration and the Family Left Behind," Working Papers 1086, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:1086
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    Keywords

    international migration; domestic migration; migration selection; unemployment; Vietnam;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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