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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

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  • 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.

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  • 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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    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 - Economic Systems - - Capitalist Systems

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