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The European Crisis and Migration to Germany: Expectations and the Diversion of Migration Flows

Listed author(s):
  • Simone BERTOLI

    ()

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Herbert BRÜCKER
  • Jesús FERNÁNDEZ-HUERTAS MORAGA

The European crisis has diverted migration flows away from countries affected by the recession towards Germany. The diversion process creates a challenge for traditional discrete-choice models that assume that only bilateral factors account for dyadic migration rates. This paper shows how taking into account the sequential nature of migration decisions leads to write the bilateral migration rate as a function of expectations about the evolution of economic conditions in alternative destinations. Empirically, we incorporate 10-year bond yields as an explanatory variable capturing forward-looking expectations and apply our model to an empirical analysis of migration from the countries of the European Economic Association to Germany in the period 2006-2012. We show that disregarding alternative destinations leads to substantial biases in the estimation of the determinants of migration rates.

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Paper provided by CERDI in its series Working Papers with number 201321.

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Length: 55
Date of creation: 2013
Publication status: Published in Regional Science and Urban Economics, 2016, pages 61-72
Handle: RePEc:cdi:wpaper:1467
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