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The Long-Term Impact of International Migration on Economic Decision-Making: Evidence from a Migration Lottery and Lab-in-the-Field Experiments

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Listed:
  • John Gibson

    (University of Waikato)

  • David McKenzie

    (World Bank)

  • Halahingano Rohorua

    (University of Waikato)

  • Steven Stillman

    (Free University of Bozen-Bolzano)

Abstract

We study how migration from a poor to a rich country affects key economic beliefs, preference parameters, and transnational household decision-making efficiency. Our setting is the migration of Tongans to New Zealand through a migration lottery program. In a ten-year follow-up survey of individuals applying for this program we elicit risk and time preferences and pro-market beliefs. We also link migrants and potential migrants to a partner household consisting of family members who would stay behind if they moved. We play lab-in-the-field games designed to measure the degree of intra-family trust and the efficiency of intra-family decision-making. Migration provides a large and permanent positive shock to income, a large change in economic institutions, and a reduction in interactions with partner household members. Despite these changes, we find no significant impacts of migration on risk and time preferences, pro-market beliefs, or in the decision-making efficiency of transnational households. This stability in the face of such a large and life-changing event lends credence to economic models of migration that treat these determinants of decision-making as time-invariant, and contrasts with recent evidence on preference changes after negative shocks.

Suggested Citation

  • John Gibson & David McKenzie & Halahingano Rohorua & Steven Stillman, 2016. "The Long-Term Impact of International Migration on Economic Decision-Making: Evidence from a Migration Lottery and Lab-in-the-Field Experiments," CReAM Discussion Paper Series 1614, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:1614
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    3. Sihong Xiong & Ya Wu & Shihai Wu & Fang Chen & Jianzhong Yan, 2020. "Determinants of migration decision-making for rural households: a case study in Chongqing, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1623-1639, November.
    4. Goldbach, Carina & Schlüter, Achim, 2018. "Risk aversion, time preferences, and out-migration. Experimental evidence from Ghana and Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 132-148.

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    More about this item

    Keywords

    Migration; economic beliefs; preferences; household efficiency; transnational household;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • P1 - Economic Systems - - Capitalist Systems

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