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Self-Selection Of Emigrants: Theory And Evidence On Stochastic Dominance In Observable And Unobservable Characteristics

Author

Listed:
  • Borjas, George J.
  • Kauppinen, Ilpo
  • Poutvaara, Panu

Abstract

The Roy model has more precise predictions about the self-selection of migrants than previously realised. The conditions shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and non-migrants. We test these predictions using the Danish full population administrative data. We find strong evidence of positive self-selection of emigrants in terms of pre-emigration earnings and residual earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non-migrants. Decomposing the self-selection in total earnings reveals that unobserved abilities play the dominant role.

Suggested Citation

  • Borjas, George J. & Kauppinen, Ilpo & Poutvaara, Panu, 2019. "Self-Selection Of Emigrants: Theory And Evidence On Stochastic Dominance In Observable And Unobservable Characteristics," Munich Reprints in Economics 78274, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:78274
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    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

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