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Self-Selection of Emigrants: Theory and Evidence on Stochastic Dominance in Observable and Unobservable Characteristics

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  • George J. Borjas
  • Ilpo Kauppinen
  • Panu Poutvaara

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Abstract

We show that the Roy model has more precise predictions about the self-selection of migrants than previously realized. The same conditions that have been shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and nonmigrants. We use the Danish full population administrative data to test the predictions. We find strong evidence of positive self-selection of emigrants in terms of preemigration earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non-migrants. This result is not driven by immigration policies in destination countries. Decomposing the self-selection in total earnings into self-selection in observable characteristics and self-selection in unobservable characteristics reveals that unobserved abilities play the dominant role. This paper presents research output of the Ifo Center of Excellence for Migration and Integration Research (CEMIR)

Suggested Citation

  • George J. Borjas & Ilpo Kauppinen & Panu Poutvaara, 2015. "Self-Selection of Emigrants: Theory and Evidence on Stochastic Dominance in Observable and Unobservable Characteristics," CESifo Working Paper Series 5567, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5567
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    Cited by:

    1. Costanza Biavaschi & Michal Burzynski & Benjamin Elsner & Joël Machado, 2018. "Taking the Skill Bias out of Global Migration," Working Papers 201810, Geary Institute, University College Dublin.
    2. Martin Munk & Till Nikolka & Panu Poutvaara, 2017. "International Family Migration and the Dual-Earner Model," CReAM Discussion Paper Series 1703, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    3. Martin Junge & Martin D. Munk & Panu Poutvaara, 2013. "International Migration of Couples," Norface Discussion Paper Series 2013018, Norface Research Programme on Migration, Department of Economics, University College London.
    4. repec:spr:ijphth:v:63:y:2018:i:3:d:10.1007_s00038-017-1010-5 is not listed on IDEAS
    5. Gabriel Felbermayr, 2016. "Seizing the Opportunity," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(3), pages 16-26, December.
    6. Panu Poutvaara & Daniela Wech, 2017. "Integrating Refugees into the Labor Market – a Comparison of Europe and the United States," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(4), pages 32-43, 02.
    7. Patt, Alexander & Ruhose, Jens & Wiederhold, Simon & Flores, Miguel, 2017. "International Emigrant Selection on Occupational Skills," IZA Discussion Papers 10837, Institute for the Study of Labor (IZA).
    8. Ilpo Kauppinen & Panu Poutvaara, 2012. "Preferences for Redistribution among Emigrants from a Welfare State," ifo Working Paper Series 120, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    9. repec:ces:ifodic:v:14:y:2017:i:4:p:19267786 is not listed on IDEAS

    More about this item

    Keywords

    international migration; Roy model; self selection;

    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

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