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Rationality of Migration

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  • Insan Tunali

    (Department of Economics, Koc University)

Abstract

subject the paradigm of a rational individual acting upon the earnings-enhancing benefits of migration to careful statistical scrutiny, using a rich micro-data set from Turkey. I find that the Normality assumption routinely invoked in empirical work is rejected by the income data. Results based on a robust selectivity correction method support the rationality hypothesis: Both migrants and non-migrants chose the option in which they had comparative advantage. However, the estimated gain from moving is found to be negative for a substantial portion of the migrants. On the other hand, a small group of migrants realize very high returns. This lends credence to the theoretical models which view migration as a lottery of sorts: Individuals are willing to invest in a proposition which has a high probability of yielding negative returns, because the potential for a very large payoff is also there.

Suggested Citation

  • Insan Tunali, 1999. "Rationality of Migration," Working Papers 9904, Economic Research Forum, revised Feb 1999.
    • Handle: RePEc:erg:wpaper:9904
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