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The long-term impact of international migration on economic decision-making : evidence from a migration lottery and lab-in-the-field experiments

Author

Listed:
  • Gibson,John
  • Mckenzie,David J.
  • Rohorua,Halahingano
  • Stillman,Steven

Abstract

This paper studies how migration from a poor to a rich country affects key economic beliefs, preference parameters, and transnational household decision-making efficiency. The setting is the migration of Tongans to New Zealand through a migration lottery program. In a 10-year follow-up survey of individuals applying for this program, the study elicited risk and time preferences and pro-market beliefs. It also linked migrants and potential migrants to a partner household consisting of family members who would stay behind if the migrants moved. Survey participants played lab-in-the-field games designed to measure the degree of intra-family trust and the efficiency of intra-family decision-making. Migration provides a large and permanent positive shock to income, a large change in economic institutions, and a reduction in interactions with partner household members. Despite these changes, the study finds no significant impacts of migration on risk and time preferences, pro-market beliefs, or the decision-making efficiency of transnational households. This stability in the face of such a large and life-changing event lends credence to economic models of migration that treat these determinants of decision-making as time-invariant, and contrasts with recent evidence on preference changes after negative shocks.

Suggested Citation

  • Gibson,John & Mckenzie,David J. & Rohorua,Halahingano & Stillman,Steven, 2016. "The long-term impact of international migration on economic decision-making : evidence from a migration lottery and lab-in-the-field experiments," Policy Research Working Paper Series 7848, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7848
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    Cited by:

    1. Batista, Catia & McKenzie, David, 2023. "Testing classic theories of migration in the lab," Journal of International Economics, Elsevier, vol. 145(C).
    2. Li, Baoxi & Cheng, Shixiong & Xiao, De, 2020. "The impacts of environmental pollution and brain drain on income inequality," China Economic Review, Elsevier, vol. 62(C).
    3. Chong Lu, 2022. "The effect of migration on rural residents’ intergenerational subjective social status mobility in China," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 3279-3308, October.
    4. Sihong Xiong & Ya Wu & Shihai Wu & Fang Chen & Jianzhong Yan, 2020. "Determinants of migration decision-making for rural households: a case study in Chongqing, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1623-1639, November.
    5. Barsbai, Toman & Licuanan, Victoria & Steinmayr, Andreas & Tiongson, Erwin & Yang, Dean, 2024. "Information and immigrant settlement," Journal of Development Economics, Elsevier, vol. 170(C).
    6. David McKenzie, 2024. "Fears and Tears: Should More People Be Moving within and from Developing Countries, and What Stops this Movement?," The World Bank Research Observer, World Bank, vol. 39(1), pages 75-96.
    7. Goldbach, Carina & Schlüter, Achim, 2018. "Risk aversion, time preferences, and out-migration. Experimental evidence from Ghana and Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 132-148.
    8. Wang, Jianxin & Yuan, Caiyun & Zhang, Qian & Houser, Daniel, 2023. "Parents’ absence harms norm obedience of girls more than boys," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 17-29.
    9. Toman Barsbai & Victoria Licuanan & Andreas Steinmayr & Erwin Tiongson & Dean Yang, 2020. "Information and the Acquisition of Social Network Connections," NBER Working Papers 27346, National Bureau of Economic Research, Inc.
    10. Laurent Bossavie & Çağlar Özden, 2023. "Impacts of Temporary Migration on Development in Origin Countries," The World Bank Research Observer, World Bank, vol. 38(2), pages 249-294.
    11. Francesco Bripi & Daniela Grieco, 2023. "Participatory incentives," Experimental Economics, Springer;Economic Science Association, vol. 26(4), pages 813-849, September.
    12. Giambra, Samuele & McKenzie, David, 2021. "Self-employment and migration," World Development, Elsevier, vol. 141(C).
    13. Christian Dustmann & Francesco Fasani & Xin Meng & Luigi Minale, 2023. "Risk Attitudes and Household Migration Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 112-145.
    14. Jorge González Chapela, 2022. "Is there a patience premium on migration?," Empirical Economics, Springer, vol. 63(4), pages 2025-2055, October.
    15. Catia Batista & Rita Mira Vaz, 2023. "The impact of non-cognitive individual characteristics on migrant integration," NOVAFRICA Working Paper Series wp2304, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.

    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies

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