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Immigrants' Wage Growth and Selective Out-Migration

Author

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  • Bijwaard, Govert

    (NIDI - Netherlands Interdisciplinary Demographic Institute)

  • Wahba, Jackline

    (University of Southampton)

Abstract

This paper examines immigrant wage growth taking into account selective out-migration using administrative data from the Netherlands. We also take into account the potential endogeneity of the immigrants' labor supply and their out-migration decisions on their earning profiles using a correlated competing risk model, but we also use standard estimations as done in previous literature. We distinguish between two types of migrants: labor and family migrants given their different labor market and out-migration behavior. We find that simple models lead to biased estimates of the wage growth of immigrants. Controlling for the selective out-migration and endogeneity of labor supply, we find that labor out-migrants are positively selected but family out-migrants are negatively selected. Furthermore, the findings underscore the importance of taking into account the endogeneity of labor supply and out-migration when estimating immigrants' wage growth.

Suggested Citation

  • Bijwaard, Govert & Wahba, Jackline, 2014. "Immigrants' Wage Growth and Selective Out-Migration," IZA Discussion Papers 8627, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8627
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    References listed on IDEAS

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    1. 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.
    2. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    3. Per-Anders Edin & Robert J. LaLonde & Olof Aslund, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Papers 0020, Harris School of Public Policy Studies, University of Chicago.
    4. Bijwaard, Govert E. & Wahba, Jackline, 2014. "Do high-income or low-income immigrants leave faster?," Journal of Development Economics, Elsevier, vol. 108(C), pages 54-68.
    5. Christian Dustmann, 2014. "Selective Outmigration and the Estimation of Immigrants Earnings Profiles," RF Berlin - CReAM Discussion Paper Series 1402, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    6. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    7. 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.
    8. Wei-Yin Hu, 2000. "Immigrant Earnings Assimilation: Estimates from Longitudinal Data," American Economic Review, American Economic Association, vol. 90(2), pages 368-372, May.
    9. Biavaschi, Costanza, 2016. "Recovering the counterfactual wage distribution with selective return migration," Labour Economics, Elsevier, vol. 38(C), pages 59-80.
    10. 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.
    11. Pischke, Jörn-Steffen, 1992. "Assimilation and the earnings of guestworkers in Germany," ZEW Discussion Papers 92-17, ZEW - Leibniz Centre for European Economic Research.
    12. Borjas, George J, 1989. "Immigrant and Emigrant Earnings: A Longitudinal Study," Economic Inquiry, Western Economic Association International, vol. 27(1), pages 21-37, January.
    13. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2014. "A Nation of Immigrants: Assimilation and Economic Outcomes in the Age of Mass Migration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 467-506.
    14. 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.
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    Cited by:

    1. Elida Cena & Derek Heim, 2022. "A Regretful Journey Home: Albanian Return Migration in the Wake of the Global Financial Crisis of 2008," Journal of International Migration and Integration, Springer, vol. 23(2), pages 499-518, June.
    2. Govert E. Bijwaard & Jackline Wahba, 2023. "Return Versus onward Migration: Go Back or Move On?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 640-667, September.

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    More about this item

    Keywords

    competing risks; labor market transitions; migration dynamics; immigrant assimilation; income growth;
    All these keywords.

    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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