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Income Maximization and the Selection and Sorting of International Migrants

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Author Info
Jeffrey Grogger
Gordon H. Hanson

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Abstract

Two prominent features of international labor movements are that more educated individuals are more likely to emigrate (positive selection) and more-educated migrants are more likely to settle in destination countries with high rewards to skill (positive sorting). Using data on emigrant stocks by schooling level and source country in OECD destinations, we find that a simple model of income maximization can account for both phenomena. Results on selection show that migrants for a source-destination pair are more educated relative to non-migrants, the larger is the skill-related difference in earnings between the destination country and the source. Results on sorting indicate that the relative stock of more-educated migrants in a destination is increasing in the level earnings difference between high and low-skilled workers. We use our framework to compare alternative specifications of international migration, estimate the magnitude of migration costs by source-destination pair, and assess the contribution of wage differences to how migrants sort themselves across destination countries.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13821.

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Date of creation: Feb 2008
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Handle: RePEc:nbr:nberwo:13821

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Luca MARCHIORI & I-Ling SHEN & FrŽdŽric DOCQUIER, 2009. "Brain drain in globalization A general equilibrium analysis from the sending countriesÕ perspective," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009013, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES). [Downloadable!]
    Other versions:
  3. Gibson, John & McKenzie, David, 2009. "The microeconomic determinants of emigration and return migration of the best and brightest : evidence from the Pacific," Policy Research Working Paper Series 4965, The World Bank. [Downloadable!]
    Other versions:
  4. Karin Mayr & Giovanni Peri, 2008. "Return Migration as a Channel of Brain Gain," NBER Working Papers 14039, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Gould, Eric D & Moav, Omer, 2008. "When is "Too Much" Inequality Not Enough? The Selection of Israeli Emigrants," CEPR Discussion Papers 6955, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Hoekman, Bernard & Ozden, Caglar, 2009. "The Euro-mediterranean partnership : trade in services as an alternative to migration ?," Policy Research Working Paper Series 5049, The World Bank. [Downloadable!]
  7. Peter Egger & Doina Maria Radulescu, 2008. "The Influence of Labor Taxes on the Migration of Skilled Workers," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  8. Federico S. Mandelman & Andrei Zlate, 2008. "Immigration and the macroeconomy," Working Paper 2008-25, Federal Reserve Bank of Atlanta. [Downloadable!]
  9. Simone Bertoli & Herbert Brücker, 2008. "Extending the case for a beneficial brain drain," Working Papers Series wp2008_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze Economiche. [Downloadable!]
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