Testing classic theories of migration in the lab

Cátia Batista, David McKenzie

Research output: Contribution to conferencePaper

Abstract

We use incentivized laboratory experiments to investigate how potential migrants make decisions between working in different destinations in order to test the predictions of different classic theories of migration. We test theories of income maximization, migrant skill-selection, and multi-destination choice and how the predictions and behavior under these theories vary as we vary migration costs, liquidity constraints, risk, social benefits, and incomplete information.
We show how the basic income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, we find evidence of a home bias, where simply labelling a destination as “home” causes more people to choose that location. Thirdly, we investigate whether the independence of irrelevant
alternatives (IIA) assumption holds. We find it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once we add a risk of unemployment and incomplete information, IIA no longer holds for about 20 percent of our sample.
Original languageEnglish
Number of pages41
Publication statusPublished - 13 Apr 2018
EventAnnual Migration Meeting - UCD Geary Institute for Public Policy, Dublin, Ireland
Duration: 23 May 201924 May 2019
Conference number: 16th
http://conference.iza.org/conference_files/AMM_2019/viewProgram?conf_id=3233

Conference

ConferenceAnnual Migration Meeting
CountryIreland
CityDublin
Period23/05/1924/05/19
Internet address

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  • Cite this

    Batista, C., & McKenzie, D. (2018). Testing classic theories of migration in the lab. Paper presented at Annual Migration Meeting, Dublin, Ireland.