Testing classic theories of migration in the lab

We test different classic migration theories by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. We assess theories of income maximization, skill-selection, and multi-destination choice, as we vary migration costs, risk, social benefits, and incomplete information. The standard income maximization model leads to a much higher migration rate and more negative skill-selection than occurs when migration decisions take place under more realistic assumptions. The independence of irrelevant alternatives assumption mostly holds when decisions just involve wages and moving costs, but breaks down once we add risk and incomplete information. Cost-minimization, rather than income maximization, seems to be key in some migration decisions. The deviations found in our study between migration decisions and the predictions of classic migration theories call for richer models of migration to explain global migration patterns.