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International Migration with Heterogeneous Agents: Theory and Evidence for Germany, 1967-2009


  • Herbert Brücker

    () (University of Bamberg, IAB, Nuernberg, and IZA, Bonn.)

  • Philipp J.H. Schroeder

    (Aarhus School of Business and DIW Berlin.)


Temporary migration, though empirically relevant, is often ignored in formal models. This paper proposes a migration model with heterogeneous agents and persistent cross country income differentials that features temporary migration. In equilibrium there exists a positive relation between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, existing empirical migration models, estimating net migration flows, instead of stocks, may be misspecified. This suspicion appears to be confirmed by our investigation of the cointegration relationships of German migration stocks and flows since 1967. We find that (i) panel-unit root tests reject the hypothesis that migration flows and the explanatory variables are integrated of the same order, while migration stocks and the explanatory variables are all I(1) variables, and (ii) the hypothesis of cointegration cannot be rejected for the stock model.

Suggested Citation

  • Herbert Brücker & Philipp J.H. Schroeder, 2011. "International Migration with Heterogeneous Agents: Theory and Evidence for Germany, 1967-2009," Norface Discussion Paper Series 2011027, Norface Research Programme on Migration, Department of Economics, University College London.
  • Handle: RePEc:nor:wpaper:2011027

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    References listed on IDEAS

    1. Dustmann, Christian & Kirchkamp, Oliver, 2002. "The optimal migration duration and activity choice after re-migration," Journal of Development Economics, Elsevier, vol. 67(2), pages 351-372, April.
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    5. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute for the Study of Labor (IZA).
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    8. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    9. Hill, John K., 1987. "Immigrant decisions concerning duration of stay and migratory frequency," Journal of Development Economics, Elsevier, vol. 25(1), pages 221-234, February.
    10. Herbert Brücker & Boriss Siliverstovs, 2006. "On the estimation and forecasting of international migration: how relevant is heterogeneity across countries?," Empirical Economics, Springer, vol. 31(3), pages 735-754, September.
    11. Stefano Fachin, 2007. "Long-run trends in internal migrations in italy: a study in panel cointegration with dependent units," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 401-428.
    12. Epstein, Gil S & Hillman, Arye L., 1998. "Herd Effects and Migration," CEPR Discussion Papers 1811, C.E.P.R. Discussion Papers.
    13. Hatton, Timothy J, 1995. "A Model of U.K. Emigration, 1870-1913," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 407-415, August.
    14. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
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    Cited by:

    1. Baas, Timo & Brücker, Herbert, 2012. "The macroeconomic consequences of migration diversion: Evidence for Germany and the UK," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 180-194.
    2. Thierry Baudassé & Rémi Bazillier, 2014. "Gender inequality and emigration: Push factor or selection process?," International Economics, CEPII research center, issue 139, pages 19-47.
    3. Brücker, Herbert & Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "The European Crisis and Migration to Germany: Expectations and the Diversion of Migration Flows," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79693, Verein für Socialpolitik / German Economic Association.
    4. Herbert Brücker & Boriss Siliverstovs, 2006. "On the estimation and forecasting of international migration: how relevant is heterogeneity across countries?," Empirical Economics, Springer, vol. 31(3), pages 735-754, September.
    5. repec:ebl:ecbull:v:6:y:2006:i:2:p:1-11 is not listed on IDEAS
    6. Projektgruppe Gemeinschaftsdiagnose, 2013. "Konjunktur zieht an - Haushaltsüberschüsse sinnvoll nutzen," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(20), pages 03-60, October.
    7. Kallandranis Christos & Karidis Socrates, 2014. "Assessing the Effect of the Consumer-Voter Sentiment on Tiebout-Like Migration: The EU 27 Case," Global Economy Journal, De Gruyter, vol. 14(1), pages 1-25, June.

    More about this item


    International migration; temporary migration; panel cointegration;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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