Self-Selection in Migration and Returns to Skills
Several papers have tested the empirical validity of the migration models proposed by Borjas (1987) and Borjas, Bronars, and Trejo (1992). However, to our knowledges, none has been able to disentangle the separate impact of observable and unobservable individual characteristics, and their respective returns across different locations, on an individual's decision to migrate. We build a model in which individuals sort, in part, on potential earnings - where earnings across different locations are a function of both observable and unobservable characteristics. We focus on the inter-provincial migration patterns of Canadian physicians. We choose this particular group for several reasons including the fact that they are paid on a fee-for-service basis. Since wage rates are exogenous, earning differentials are driven by differences in productivity. We then estimate a mixed conditional-logit model to determine the effects of individual and destination-specific characteristics (particularly earnings differentials) on physician location decisions. We find, among other things, that high-productivity physicians (based on unobservables) are more likely to migrate to provinces where the productivity premium is greater, while low-productivity physicians are more likely to migrate to areas where the productivity premium is lower. These results are consistent with a modified Borjas model of self-selection in migration based on both unobservables and observables.
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- Borjas, George J. & Bronars, Stephen G. & Trejo, Stephen J., 1992.
"Self-selection and internal migration in the United States,"
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"International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States,"
Journal of Political Economy,
University of Chicago Press, vol. 113(2), pages 239-281, April.
- Daniel Chiquiar & Gordon H. Hanson, 2002. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," NBER Working Papers 9242, National Bureau of Economic Research, Inc.
- Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-235, May.
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"Self-Selection and the Earnings of Immigrants,"
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American Economic Association, vol. 77(4), pages 531-553, September.
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