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Crossing the Border: Self-Selection, Earnings and Individual Migration Decisions

Author

Listed:
  • Bertoli, Simone

    (CERDI, Université Clermont Auvergne)

  • Fernández-Huertas Moraga, Jesús

    (Universidad Carlos III de Madrid)

  • Ortega, Francesc

    (Queens College, CUNY)

Abstract

Many empirical studies on the determinants of international migration flows rely exclusively on macro data, and do not account for migrants' self-selection. We analyze a very interesting episode in international migration for which we are able to gather individual-level data covering all relevant countries, namely the exodus of Ecuadorians to Spain and the US in the aftermath of the economic collapse of 1999. Specifically, we produce selection-corrected predictions of counterfactual individual earnings and use them to estimate a discrete-choice migration equation that allows for correlated errors across destinations and a rich structure of migration costs. We find that earnings significantly shape individual migration decisions, even in an episode in which Ecuadorians mostly chose Spain where earnings were lower than in the US, and they contribute to explaining the observed composition of migration flows. Moreover, our estimates show that changes in earnings at a particular destination have a larger effect on destination choice conditional on migration than on the scale of migration.

Suggested Citation

  • Bertoli, Simone & Fernández-Huertas Moraga, Jesús & Ortega, Francesc, 2010. "Crossing the Border: Self-Selection, Earnings and Individual Migration Decisions," IZA Discussion Papers 4957, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4957
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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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