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Migration, Family, and Risk Diversification

Author

Listed:
  • Kong-Pin Chen

    (Academia Sinica and National Taiwan University, Taiwan)

  • Shin-Hwang Chiang

    (York University, Canada)

  • Siu-Fai Leung

    (Hong Kong University of Science And Technology, Hong Kong)

Abstract

This paper proposes a formal model of migration in which workers are heterogeneous and markets are stochastically correlated. We derive and characterize the optimal migration pattern of a family. It is shown to depend on differences in expected earnings, costs of migration, income risks, and more importantly market correlations. We show that migration can take place even when migrants earn less abroad and, more surprisingly, when earnings in the foreign country are riskier for every member of the family. Moreover, it may well be an optimal arrangement to have only dependents migrate, thus rationalizing the recent dependent-oriented migration flows from places like Hong Kong and Taiwan. We also provide some evidence in support of our theory.

Suggested Citation

  • Kong-Pin Chen & Shin-Hwang Chiang & Siu-Fai Leung, 2002. "Migration, Family, and Risk Diversification," Working Papers 2002_01, York University, Department of Economics.
  • Handle: RePEc:yca:wpaper:2002_01
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    Cited by:

    1. Michael A. Clemens & Hannah M. Postel, 2018. "Deterring Emigration with Foreign Aid: An Overview of Evidence from Low‐Income Countries," Population and Development Review, The Population Council, Inc., vol. 44(4), pages 667-693, December.
    2. Yigit Aydede, 2017. "Immigration and location choices of native-born workers in Canada," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 113-134, March.
    3. Massimiliano Bratti & Simona Fiore & Mariapia Mendola, 2016. "Family Size, Sibling Rivalry and Migration: Evidence from Mexico," Development Working Papers 390, Centro Studi Luca d'Agliano, University of Milano, revised 21 Jun 2016.
    4. Mohammad Arzaghi & Anil Rupasingha, 2013. "Migration As A Way To Diversify: Evidence From Rural To Urban Migration In The U.S," Journal of Regional Science, Wiley Blackwell, vol. 53(4), pages 690-711, October.
    5. Xavier Chojnicki & Ainura Uzagalieva, 2008. "Labor Migration from East to West in the Context of European Integration and Changing Socio-political Borders," CASE Network Studies and Analyses 0366, CASE-Center for Social and Economic Research.
    6. Nielsen, Helena Skyt & Svarer, Michael, 2006. "Educational Homogamy: Preferences or Opportunities?," IZA Discussion Papers 2271, Institute of Labor Economics (IZA).
    7. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    8. Richter, Susan M., 2008. "The Insurance Role of Remittances on Household Credit Demand," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6261, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Tarbalouti, Essaid, 2008. "Investissement, protectionnisme et décision de migration internationale [Investment, protectionism and decision of international migration]," MPRA Paper 56310, University Library of Munich, Germany.
    10. Chaitali Sinha, 2017. "International Migration and Welfare Implications," South Asian Journal of Macroeconomics and Public Finance, , vol. 6(2), pages 209-229, December.
    11. Pylypchuk, Yuriy, 2009. "Effects of immigration on the health insurance status of natives," Journal of Health Economics, Elsevier, vol. 28(5), pages 1028-1037, September.
    12. Akgüç, Mehtap & Liu, Xingfei & Tani, Massimiliano & Zimmermann, Klaus F., 2016. "Risk attitudes and migration," China Economic Review, Elsevier, vol. 37(C), pages 166-176.
    13. Maurice Kugler, 2006. "Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia," Borradores de Economia 370, Banco de la Republica de Colombia.
    14. Siriwardhane, Dinesha & Amaratunge, Sampath, 2018. "Remittances and Risk Diversification in Developing Country Context: Evidence from Sri Lanka," MPRA Paper 107235, University Library of Munich, Germany, revised 04 Jun 2018.
    15. An, Galina & Becker, Charles M., 2013. "Uncertainty, Insecurity, and Emigration from Kazakhstan to Russia," World Development, Elsevier, vol. 42(C), pages 44-66.
    16. Ahsan, S. Quamrul, 2007. "Temporary Migration, Labour Supply and Welfare," Working Papers in Economics 01/07, University of Bergen, Department of Economics.
    17. 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).
    18. Ali GÖKHAN & Alpay FILIZTEKIN, 2008. "The Determinants of Internal Migration In Turkey," EcoMod2008 23800044, EcoMod.
    19. Jessica Pearlman & Lisa D. Pearce & Dirgha J. Ghimire & Prem Bhandari & Taylor Hargrove, 2017. "Postmarital Living Arrangements in Historically Patrilocal Settings: Integrating Household Fission and Migration Perspectives," Demography, Springer;Population Association of America (PAA), vol. 54(4), pages 1425-1449, August.
    20. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.

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    More about this item

    Keywords

    Migration; Emigration; Family; Risk Diversification; Dependents;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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