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...

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Main Authors:	Batista, Catia, McKenzie, David
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	MIGRANT SELECTION DESTINATION CHOICE LAB EXPERIMENT
Online Access:	http://documents.worldbank.org/curated/en/751311629230403942/Testing-Classic-Theories-of-Migration-in-the-Lab http://hdl.handle.net/10986/36174

id	okr-10986-36174
recordtype	oai_dc
spelling	okr-10986-361742021-08-20T05:10:42Z Testing Classic Theories of Migration in the Lab Batista, Catia McKenzie, David MIGRANT SELECTION DESTINATION CHOICE LAB EXPERIMENT 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. 2021-08-19T14:30:42Z 2021-08-19T14:30:42Z 2021-08 Working Paper http://documents.worldbank.org/curated/en/751311629230403942/Testing-Classic-Theories-of-Migration-in-the-Lab http://hdl.handle.net/10986/36174 English Policy Research Working Paper;No. 9751 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	MIGRANT SELECTION DESTINATION CHOICE LAB EXPERIMENT
spellingShingle	MIGRANT SELECTION DESTINATION CHOICE LAB EXPERIMENT Batista, Catia McKenzie, David Testing Classic Theories of Migration in the Lab
relation	Policy Research Working Paper;No. 9751
description	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.
format	Working Paper
author	Batista, Catia McKenzie, David
author_facet	Batista, Catia McKenzie, David
author_sort	Batista, Catia
title	Testing Classic Theories of Migration in the Lab
title_short	Testing Classic Theories of Migration in the Lab
title_full	Testing Classic Theories of Migration in the Lab
title_fullStr	Testing Classic Theories of Migration in the Lab
title_full_unstemmed	Testing Classic Theories of Migration in the Lab
title_sort	testing classic theories of migration in the lab
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/en/751311629230403942/Testing-Classic-Theories-of-Migration-in-the-Lab http://hdl.handle.net/10986/36174
_version_	1764484661400043520

Testing Classic Theories of Migration in the Lab

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