Testing Classic Theories of Migration in the Lab
The predictions of different classic migration theories are tested by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. First, the authors test theories of income maxim...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/751311629230403942/Testing-Classic-Theories-of-Migration-in-the-Lab http://hdl.handle.net/10986/36174 |
| Summary: | The predictions of different classic
migration theories are tested by using incentivized
laboratory experiments to investigate how potential migrants
decide between working in different destinations. First, the
authors test theories of income maximization, migrant
skill-selection, and multi-destination choice as they vary
migration costs, liquidity constraints, risk, social
benefits, and incomplete information. The standard 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, these lab experiments are used to
investigate whether the independence of irrelevant
alternatives assumption holds. The results show that it
holds for most people when decisions just involve wages,
costs, and liquidity constraints. However, once the risk of
unemployment and incomplete information is added,
independence of irrelevant alternatives no longer holds for
about 20 percent of the sample. |
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