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Migration and Human Capital

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Abstract

International migration can be viewed as a natural experiment, placing a worker into a different economic environment while holding his human capital endowment fixed. Migration data therefore provide an opportunity to learn not only about the economic forces underlying migration, but also about the nature of human capital. Existing migration theories have not taken advantage of this opportunity. Instead of developing a framework capable of accounting for a broad range of observations, the literature has studied individual observations, such as migrant selectivity or assimilation rates, largely in isolation. A variety of separate theories has been proposed, based on assumptions that are not always mutually consistent. This paper makes a step towards a unified theory of migration. We develop a set of stylized facts characterizing immigrant earnings histories and show how a model of human capital can provide a coherent explanation for these observations. In contrast to most of the literature, we do not assume that unobserved primitives, such as preferences or technologies, differ across countries. In particular, cross-country wage differentials arise endogenously as a feature of labor market equilibrium. Since explaining immigrant earnings is of primary interest, this is an important innovation.

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Paper provided by Arizona State University, Department of Economics in its series Working Papers with number 97/6.

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Handle: RePEc:wop:astewp:9706
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Keywords: Migration; human capital; economic growth.;

Find related papers by JEL classification:

  • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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  8. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-930, September.
  9. Borjas, George J, 1993. "The Intergenerational Mobility of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 113-135, January.
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  11. Borjas, George J, 1995. "Ethnicity, Neighborhoods, and Human-Capital Externalities," American Economic Review, American Economic Association, vol. 85(3), pages 365-390, June.
  12. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-553, September.
  13. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
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  17. Katz, Eliakim & Stark, Oded, 1987. "International Migration under Asymmetric Information," Economic Journal, Royal Economic Society, vol. 97(387), pages 718-726, September.
  18. Christian Dustmann, 1996. "An Economic Analysis of Return Migration," Discussion Papers 96-02 ISSN 1350-6722, University College London, Department of Economics.
  19. Guillermina Jasso & Mark Rosensweig & James P. Smith, 2003. "The Earnings of US immigrants," Labor and Demography 0312007, EconWPA.
  20. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
  21. Barry R. Chiswick, 1988. "Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 571-597.
  22. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-391, October.
  23. Stark, Oded, 1995. " Return and Dynamics: The Path of Labor Migration When Workers Differ in Their Skills and Information Is Asymmetric," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(1), pages 55-71, March.
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