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International Mobility: A Longitudinal Analysis of the Effects on Individuals Earnings

Listed author(s):
  • Finnie, Ross

The degree to which workers leave the country was a much-discussed issue in Canada - as elsewhere - in the latter part of the 1990s, although recent empirical evidence shows that it was not such a widespread phenomenon after all, and that rates of leaving have declined substantially in recent years. One aspect of the international mobility dynamic that has not yet been addressed, however, is the effect on individuals' earnings of leaving the country and then returning. The lack of empirical evidence on this issue stems principally from the unavailability of the kind of longitudinal data required for such an analysis. The contribution of this paper is to present evidence on how leaving and returning to Canada affects individuals' earnings based on an analysis carried out with the Longitudinal Administrative Database. The models estimated use movers' (relative) pre-departure profiles as the basis of comparison for their post-return (relative) earnings patterns in order to control for any pre-existing differences in the earnings profiles of movers and non-movers (while also controlling for other factors that affect individuals' earnings at any point in time). Overall, those who leave the country have higher earnings than non-movers upon their returns, but most of these differences were already present in the pre-departure period. In terms of net earnings growth, individuals who were away for two to five years appear to do best, and enjoy earnings that are 12% higher in the five years following their return relative to their pre-departure levels (controlling for other factors), while those who leave for just one year have smaller gains, and those who spend longer periods abroad have lower (relative) earnings upon their returns as compared to before leaving (perhaps due to other events associated with their mobility patterns). Interestingly, these gains seem to be concentrated among those who had the lowest pre-move earnings levels (less than $60,000), while those higher up on the earnings ladder had smaller and more variable gains.

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Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2007289e.

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Date of creation: 18 Jan 2007
Handle: RePEc:stc:stcp3e:2007289e
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  1. Finnie, Ross, 2006. "International Mobility: Patterns of Exit and Return of Canadians, 1982 to 2003," Analytical Studies Branch Research Paper Series 2006288e, Statistics Canada, Analytical Studies Branch.
  2. Steven Globerman, 2000. "Trade Liberalisation and the Migration of Skilled Professionals and Managers: The North American Experience," The World Economy, Wiley Blackwell, vol. 23(7), pages 901-922, July.
  3. Ross Finnie, 2004. "Who moves? A logit model analysis of inter-provincial migration in Canada," Applied Economics, Taylor & Francis Journals, vol. 36(16), pages 1759-1779.
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