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Risk Attitudes and Household Migration Decisions

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  • Dustmann, Christian

    () (University College London)

  • Fasani, Francesco

    () (Queen Mary, University of London)

  • Meng, Xin

    () (Australian National University)

  • Minale, Luigi

    () (Universidad Carlos III de Madrid)

Abstract

This paper analyses the relation between individual migrations and the risk attitudes of other household members when migration is a household decision. We develop a simple model that implies that which member migrates depends on the distribution of risk attitudes among all household members, and that the risk diversification gain to other household members may induce migrations that would not take place in an individual framework. Using unique data for China on risk attitudes of internal (rural-urban) migrants and the families left behind, we empirically test three key implications of the model: (i) that conditional on migration gains, less risk averse individuals are more likely to migrate; (ii) that within households, the least risk averse individual is more likely to emigrate; and (iii) that across households, the most risk averse households are more likely to send migrants as long as they have at least one family member with sufficiently low risk aversion. Our results not only provide evidence that migration decisions are taken on a household level but also that the distribution of risk attitudes within the household affects whether a migration takes place and who will emigrate.

Suggested Citation

  • Dustmann, Christian & Fasani, Francesco & Meng, Xin & Minale, Luigi, 2017. "Risk Attitudes and Household Migration Decisions," IZA Discussion Papers 10603, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10603
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Akgüç, Mehtap & Liu, Xingfei & Tani, Massimiliano & Zimmermann, Klaus F., 2016. "Risk attitudes and migration," China Economic Review, Elsevier, vol. 37(C), pages 166-176.
    2. Geraldine Bocquého & Marc Deschamps & Jenny Helstroffer & Julien Jacob & Majlinda Joxhe, 2018. "Risk and Refugee Migration," Working Papers of BETA 2018-16, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. 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.
    4. Bertoli, Simone & Murard, Elie, 2017. "Migration and Co-Residence Choices: Evidence from Mexico," IZA Discussion Papers 11172, Institute for the Study of Labor (IZA).
    5. Kazianga, Harounan & Wahhaj, Zaki, 2018. "Will Urban Migrants Formally Insure their Rural Relatives? Family Networks and Rainfall Index Insurance in Burkina Faso," GLO Discussion Paper Series 194, Global Labor Organization (GLO).
    6. repec:spr:jopoec:v:30:y:2017:i:4:d:10.1007_s00148-017-0644-1 is not listed on IDEAS
    7. Maurice Schiff, 2017. "Ability drain: size, impact, and comparison with brain drain under alternative immigration policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1337-1354, October.

    More about this item

    Keywords

    risk aversion; internal migration; household decisions;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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