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Direct Evidence in Risk Attitudes and Migration

  • Jaeger David A.
  • Dohmen Thomas
  • Falk Armin
  • Huffman David
  • Sunde Uwe
  • Bonin Holger

    (ROA rm)

It has long been hypothesized that individuals'' migration propensities depend on their attitudes towards risk, but the empirical evidence, to the extent that it exists, has been indirect. In this paper, we use newly available data from the German Socio-Economic Panel to measure directly the relationship between migration propensities and attitudes towards risk. We find that individuals who are more willing to take risks are more likely to migrate between labor markets in Germany. This result is robust to stratifying by age, sex, education, national origin, and a variety of other demographic characteristics. The effect is substantial relative to the unconditional migration propensity and compared to the conventional determinants of migration. We find no evidence that these findings are the result of reverse causality.

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Paper provided by Maastricht University, Research Centre for Education and the Labour Market (ROA) in its series ROA Research Memorandum with number 011.

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Date of creation: 2008
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Handle: RePEc:unm:umaror:2008011
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  1. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "The Intergenerational Transmission of Risk and Trust Attitudes," IZA Discussion Papers 2380, Institute for the Study of Labor (IZA).
  2. David A. Jaeger & Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Holger Bonin, 2010. "Direct Evidence on Risk Attitudes and Migration," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 684-689, August.
  3. Axel Heitmueller, 2005. "Unemployment benefits, risk aversion, and migration incentives," Journal of Population Economics, Springer, vol. 18(1), pages 93-112, 01.
  4. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Discussion Papers of DIW Berlin 511, DIW Berlin, German Institute for Economic Research.
  5. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
  6. Francesco Daveri & Riccardo Faini, . "Where do migrants go?," Working Papers 124, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Katz, Eliakim & Stark, Oded, 1986. "Labor Migration and Risk Aversion in Less Developed Countries," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 134-49, January.
  8. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  9. Stark, Oded & Levhari, David, 1982. "On Migration and Risk in LDCs," Economic Development and Cultural Change, University of Chicago Press, vol. 31(1), pages 191-96, October.
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