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Do High-Income or Low-Income Immigrants Leave Faster?

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  • Bijwaard, Govert

    () (NIDI - Netherlands Interdisciplinary Demographic Institute)

  • Wahba, Jackline

    () (University of Southampton)

Abstract

We estimate the impact of the income earned in the host country on return migration of labor migrants from developing countries. We use a three-state correlated competing risks model to account for the strong dependence of labor market status and the income earned. Our analysis is based on administrative panel data of recent labor immigrants from developing countries to the Netherlands. The empirical results show that intensities of return migration are U-shaped with respect to migrants' income, implying a higher intensity in low- and high- income groups. Indeed, the lowest-income group has the highest probability of return. We also find that ignoring the interdependence of labor market status and the income earned leads to an overestimating the income effect on departure.

Suggested Citation

  • Bijwaard, Govert & Wahba, Jackline, 2013. "Do High-Income or Low-Income Immigrants Leave Faster?," IZA Discussion Papers 7732, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7732
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    References listed on IDEAS

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    1. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence," CReAM Discussion Paper Series 0702, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    2. Borjas, George J, 1989. "Immigrant and Emigrant Earnings: A Longitudinal Study," Economic Inquiry, Western Economic Association International, vol. 27(1), pages 21-37, January.
    3. Thomas, Jonathan M, 1996. "On the Interpretation of Covariate Estimates in Independent Competing-Risks Models," Bulletin of Economic Research, Wiley Blackwell, vol. 48(1), pages 27-39, January.
    4. Lena Nekby, 2006. "The emigration of immigrants, return vs onward migration: evidence from Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 197-226, June.
    5. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, June.
    6. Gibson, John & McKenzie, David, 2011. "The microeconomic determinants of emigration and return migration of the best and brightest: Evidence from the Pacific," Journal of Development Economics, Elsevier, vol. 95(1), pages 18-29, May.
    7. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
    8. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-559, November.
    9. Bijwaard, Govert, 2009. "Labour Market Status and Migration Dynamics," IZA Discussion Papers 4530, Institute for the Study of Labor (IZA).
    10. Govert E. Bijwaard & Christian Schluter & Jackline Wahba, 2014. "The Impact of Labor Market Dynamics on the Return Migration of Immigrants," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 483-494, July.
    11. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    12. Tomi Kyyrä, 2009. "Marginal Effects for Competing Risks Models with Piecewise Constant Hazards," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(4), pages 539-565, August.
    13. Amelie Constant & Douglas S. Massey, 2003. "Self-selection, earnings, and out-migration: A longitudinal study of immigrants to Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(4), pages 631-653, November.
    14. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
    15. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
    16. Borjas, George J & Bratsberg, Bernt, 1996. "Who Leaves? The Outmigration of the Foreign-Born," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 165-176, February.
    17. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
    18. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767.
    19. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
    20. Govert Bijwaard, 2010. "Immigrant migration dynamics model for The Netherlands," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1213-1247, September.
    21. Galor, Oded & Stark, Oded, 1991. "The probability of return migration, migrants' work effort, and migrants' performance," Journal of Development Economics, Elsevier, vol. 35(2), pages 399-405, April.
    22. Guillermina Jasso & Mark Rosenzweig, 1982. "Estimating the emigration rates of legal immigrants using administrative and survey data: The 1971 cohort of immigrants to the United States," Demography, Springer;Population Association of America (PAA), vol. 19(3), pages 279-290, August.
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    Citations

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    Cited by:

    1. Govert Bijwaard, 2015. "Income of immigrants and their return," IZA World of Labor, Institute for the Study of Labor (IZA), pages 141-141, April.
    2. Dustmann, Christian & Görlach, Joseph-Simon, 2016. "Estimating immigrant earnings profiles when migrations are temporary," Labour Economics, Elsevier, vol. 41(C), pages 1-8.
    3. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2016. "Global Talent Flows," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 83-106, Fall.
    4. World Bank Group, 2017. "Migration and Remittances," World Bank Other Operational Studies 28444, The World Bank.
    5. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.
    6. repec:eee:exehis:v:64:y:2017:i:c:p:37-52 is not listed on IDEAS
    7. Michal Burzynski, 2016. "Time, Space and Skills in Designing Migration Policy," CREA Discussion Paper Series 16-12, Center for Research in Economic Analysis, University of Luxembourg.
    8. repec:anr:reveco:v:9:y:2017:p:201-234 is not listed on IDEAS
    9. Jackline Wahba, 2014. "Return migration and economic development," Chapters,in: International Handbook on Migration and Economic Development, chapter 12, pages 327-349 Edward Elgar Publishing.
    10. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2017. "High-Skilled Migration and Agglomeration," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 201-234, September.
    11. Nagore García, Amparo & van Soest, Arthur, 2014. "Unemployment Transitions to Stable and Unstable Jobs Before and During the Crisis," IZA Discussion Papers 8121, Institute for the Study of Labor (IZA).
    12. Rémi Bazillier & Francesco Magris & Daniel Mirza, 2017. "Out-migration and economic cycles," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 39-69, February.
    13. Govert Bijwaard & Stijn Doeselaar, 2014. "The impact of changes in the marital status on return migration of family migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 961-997, October.
    14. Bijwaard, Govert & Wahba, Jackline, 2014. "Immigrants' Wage Growth and Selective Out-Migration," IZA Discussion Papers 8627, Institute for the Study of Labor (IZA).
    15. Jackline Wahba, 2015. "Who benefits from return migration to developing countries?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 123-123, February.
    16. Nagore García, Amparo & van Soest, Arthur, 2015. "New Job Matches and Their Stability Before and During the Crisis," IZA Discussion Papers 9574, Institute for the Study of Labor (IZA).
    17. repec:leo:wpaper:2314 is not listed on IDEAS
    18. Govert Bijwaard, 2014. "Multistate event history analysis with frailty," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(58), pages 1591-1620, May.

    More about this item

    Keywords

    migration dynamics; labour market transitions; immigrant assimilation; competing risks;

    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
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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