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Risk Aversion, Time Preference and Cross-border Commuting and Migration Intentions

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  • Klaus Nowotny

Abstract

This paper analyses the effect of individual risk aversion and time preference on cross-border commuting and migration intentions. Both the theoretical and empirical results show that the probability of being willing to migrate decreases with risk aversion, the rate of time preference, and the maximum number of periods an individual can work abroad. The probability of being willing to commute also decreases with risk aversion, but at a smaller rate compared to the willingness to migrate, while it is (largely) unaffected by intertemporal consumption preferences. The analysis helps to shed more light on the role of time preference and risk aversion as determinants of mobility decisions, which is especially important for integrating regions where both migration and commuting are possible, as in the enlarged European Union.

Suggested Citation

  • Klaus Nowotny, 2010. "Risk Aversion, Time Preference and Cross-border Commuting and Migration Intentions," WIFO Working Papers 379, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2010:i:379
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    File URL: https://www.wifo.ac.at/wwa/pubid/40443
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    2. Jean-Louis Arcand & Linguère M'Baye, 2011. "Braving the waves: The economics of clandestine migration from Africa," CERDI Working papers halshs-00575606, HAL.
    3. Reinhard A. Weisser, 2019. "The price of mobility," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 39(1), pages 25-64, February.
    4. Klöble, Katrin, 2021. "A behavioural perspective on the drivers of migration: Studying economic and social preferences using the Gallup World Poll," IDOS Discussion Papers 4/2021, German Institute of Development and Sustainability (IDOS).
    5. 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.
    6. Maciej Bukowski & Piotr Lewandowski & Iza Sobiech & Andrzej Zurawski & Jan Gaska & Aleksander Sniegocki, 2011. "Employment in Poland 2010. Integration and Globalization," Books and Reports published by IBS, Instytut Badan Strukturalnych, number zwp2010 edited by Maciej Bukowski, january.
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