How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration

Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it difficult to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of...

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Main Authors:	McKenzie, David, Gibson, John, Stillman, Steven
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AVERAGE CHANGE AVERAGE INCOME BENCHMARKS CONTROL GROUPS COUNTERFACTUAL CROSS-COUNTRY STUDIES EMPIRICAL LITERATURE EXCHANGE RATES EXPERIMENTAL DATA EXPERIMENTAL METHODS FUNCTIONAL FORM GDP GDP PER CAPITA HOUSEHOLD SURVEY DATA INCOME INCOME DISTRIBUTION INCOME GAINS INCOMES INSTRUMENTAL VARIABLES LABOR INCOME LABOR MARKET LABOR MARKETS LABOUR MARKETS LOTTERIES LOTTERY MACROECONOMIC FACTORS MARKET INCOME MATCHING METHODS MEAN INCOME NATIONAL INCOME 0 HYPOTHESIS PACIFIC ISLANDS POLICY RESEARCH PROGRAM EVALUATION PROPENSITY SCORE MATCHING PUBLIC POLICY REGRESSION ANALYSIS REGRESSION RESULTS SAMPLE SIZE SIGNIFICANT IMPROVEMENT SURVEY DESIGN TRAINING PROGRAMS TREATMENT EFFECTS WAGE INCOME
Online Access:	http://documents.worldbank.org/curated/en/2006/05/6759751/important-selection-experimental-versus-non-experimental-measures-income-gains-migration http://hdl.handle.net/10986/8679

id	okr-10986-8679
recordtype	oai_dc
spelling	okr-10986-86792021-04-23T14:02:40Z How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration McKenzie, David Gibson, John Stillman, Steven AVERAGE CHANGE AVERAGE INCOME BENCHMARKS CONTROL GROUPS COUNTERFACTUAL CROSS-COUNTRY STUDIES EMPIRICAL LITERATURE EXCHANGE RATES EXPERIMENTAL DATA EXPERIMENTAL METHODS FUNCTIONAL FORM GDP GDP PER CAPITA HOUSEHOLD SURVEY DATA INCOME INCOME DISTRIBUTION INCOME GAINS INCOMES INSTRUMENTAL VARIABLES LABOR INCOME LABOR MARKET LABOR MARKETS LABOUR MARKETS LOTTERIES LOTTERY MACROECONOMIC FACTORS MARKET INCOME MATCHING METHODS MEAN INCOME NATIONAL INCOME 0 HYPOTHESIS PACIFIC ISLANDS POLICY RESEARCH PROGRAM EVALUATION PROPENSITY SCORE MATCHING PUBLIC POLICY REGRESSION ANALYSIS REGRESSION RESULTS SAMPLE SIZE SIGNIFICANT IMPROVEMENT SURVEY DESIGN TRAINING PROGRAMS TREATMENT EFFECTS WAGE INCOME Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it difficult to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery to choose among the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. The authors also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group with the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. They find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well. 2012-06-21T18:08:12Z 2012-06-21T18:08:12Z 2006-05 http://documents.worldbank.org/curated/en/2006/05/6759751/important-selection-experimental-versus-non-experimental-measures-income-gains-migration http://hdl.handle.net/10986/8679 English Policy Research Working Paper; No. 3906 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Tonga New Zealand
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AVERAGE CHANGE AVERAGE INCOME BENCHMARKS CONTROL GROUPS COUNTERFACTUAL CROSS-COUNTRY STUDIES EMPIRICAL LITERATURE EXCHANGE RATES EXPERIMENTAL DATA EXPERIMENTAL METHODS FUNCTIONAL FORM GDP GDP PER CAPITA HOUSEHOLD SURVEY DATA INCOME INCOME DISTRIBUTION INCOME GAINS INCOMES INSTRUMENTAL VARIABLES LABOR INCOME LABOR MARKET LABOR MARKETS LABOUR MARKETS LOTTERIES LOTTERY MACROECONOMIC FACTORS MARKET INCOME MATCHING METHODS MEAN INCOME NATIONAL INCOME 0 HYPOTHESIS PACIFIC ISLANDS POLICY RESEARCH PROGRAM EVALUATION PROPENSITY SCORE MATCHING PUBLIC POLICY REGRESSION ANALYSIS REGRESSION RESULTS SAMPLE SIZE SIGNIFICANT IMPROVEMENT SURVEY DESIGN TRAINING PROGRAMS TREATMENT EFFECTS WAGE INCOME
spellingShingle	AVERAGE CHANGE AVERAGE INCOME BENCHMARKS CONTROL GROUPS COUNTERFACTUAL CROSS-COUNTRY STUDIES EMPIRICAL LITERATURE EXCHANGE RATES EXPERIMENTAL DATA EXPERIMENTAL METHODS FUNCTIONAL FORM GDP GDP PER CAPITA HOUSEHOLD SURVEY DATA INCOME INCOME DISTRIBUTION INCOME GAINS INCOMES INSTRUMENTAL VARIABLES LABOR INCOME LABOR MARKET LABOR MARKETS LABOUR MARKETS LOTTERIES LOTTERY MACROECONOMIC FACTORS MARKET INCOME MATCHING METHODS MEAN INCOME NATIONAL INCOME 0 HYPOTHESIS PACIFIC ISLANDS POLICY RESEARCH PROGRAM EVALUATION PROPENSITY SCORE MATCHING PUBLIC POLICY REGRESSION ANALYSIS REGRESSION RESULTS SAMPLE SIZE SIGNIFICANT IMPROVEMENT SURVEY DESIGN TRAINING PROGRAMS TREATMENT EFFECTS WAGE INCOME McKenzie, David Gibson, John Stillman, Steven How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
geographic_facet	East Asia and Pacific Tonga New Zealand
relation	Policy Research Working Paper; No. 3906
description	Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it difficult to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery to choose among the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. The authors also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group with the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. They find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well.
format	Publications & Research :: Policy Research Working Paper
author	McKenzie, David Gibson, John Stillman, Steven
author_facet	McKenzie, David Gibson, John Stillman, Steven
author_sort	McKenzie, David
title	How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
title_short	How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
title_full	How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
title_fullStr	How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
title_full_unstemmed	How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration
title_sort	how important is selection? experimental versus non-experimental measures of the income gains from migration
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/05/6759751/important-selection-experimental-versus-non-experimental-measures-income-gains-migration http://hdl.handle.net/10986/8679
_version_	1764406125653917696

How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration

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