IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i8p214-d1461031.html
   My bibliography  Save this article

The Economic Decision of International Migration: Two Empirical Evidences from the United States and Canada

Author

Listed:
  • Jiyoung Park

    (Department of Urban and Regional Planning, School of Architecture and Planning, University at Buffalo, Buffalo, NY 14214, USA
    MUREPA Korea LC., Ltd., Seongnam 13640, Republic of Korea)

  • Seongwoo Lee

    (Department of Agricultural Economics and Rural Development, College of Agriculture and Life Sciences, Seoul National University, Seoul 08826, Republic of Korea)

  • Jonghoon Park

    (Department of Economics, College of Economics & Business Administration, Hanbat National University, Daejeon 34158, Republic of Korea)

Abstract

This study investigated whether economic motivations are a key factor in international migration decisions. Applying the selectivity-corrected expected income for migrants and stayers, the difference in expected income for an individual in origin and destination countries was analyzed. This study used data from the U.S. and Canada to empirically test the role of income gaps in migration decisions. The main difficulty in analyzing the role of the gaps lies in collecting both income streams for the same individual, since once an individual migrates to a different country, their potential income in the origin country cannot be observed; and vice versa for stayers. Therefore, directly applying the average income of migrants (conditionally relying on their observed characteristics) to estimate the income of stayers if they had migrated results in a biased estimate of stayers’ income. Hence, there is a need to account for selectivity in the migration decision and calculate selectivity-corrected income. The key finding in this study is that the expected income gap is positively associated with, and statistically significant for, international migration decisions for the U.S. and Canada. One of the main reasons may be the easy transfer of labor skills between countries that have similar labor environments and cultural backgrounds.

Suggested Citation

  • Jiyoung Park & Seongwoo Lee & Jonghoon Park, 2024. "The Economic Decision of International Migration: Two Empirical Evidences from the United States and Canada," Economies, MDPI, vol. 12(8), pages 1-21, August.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:8:p:214-:d:1461031
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/8/214/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/12/8/214/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    2. Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 391-409.
    3. Chris Robinson & Nigel Tomes, 1982. "Self-Selection and Interprovincial Migration in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 15(3), pages 474-502, August.
    4. J. Edward Taylor, 1992. "Earnings and Mobility of Legal and Illegal Immigrant Workers in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 889-896.
    5. Krieg, Randall G, 1993. "Black-White Regional Migration and the Impact of Education: A Multinomial Logit Analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 27(3), pages 211-222, September.
    6. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    7. Bruce D. Meyer, 1998. "Do the Poor Move to Receive Higher Welfare Benefits?," JCPR Working Papers 58, Northwestern University/University of Chicago Joint Center for Poverty Research.
    8. Mincer, Jacob, 1978. "Family Migration Decisions," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 749-773, October.
    9. Greenwood, Michael J & McDowell, John M, 1991. "Differential Economic Opportunity, Transferability of Skills, and Immigration to the United States and Canada," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 612-623, November.
    10. Oded Stark & J. Taylor, 1989. "Relative deprivation and international migration oded stark," Demography, Springer;Population Association of America (PAA), vol. 26(1), pages 1-14, February.
    11. J. Edward Taylor, 1987. "Undocumented Mexico—U.S. Migration and the Returns to Households in Rural Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 626-638.
    12. McKenzie, David & Gibson, John & Stillman, Steven, 2013. "A land of milk and honey with streets paved with gold: Do emigrants have over-optimistic expectations about incomes abroad?," Journal of Development Economics, Elsevier, vol. 102(C), pages 116-127.
    13. Roger Axelsson & Olle Westerlund, 1998. "A panel study of migration, self-selection and household real income," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(1), pages 113-126.
    14. Philip Martin, 2003. "Economic Integration and Migration: The Mexico-US Case," WIDER Working Paper Series DP2003-35, World Institute for Development Economic Research (UNU-WIDER).
    15. Katz, Eliakim & Stark, Oded, 1987. "International Migration under Asymmetric Information," Economic Journal, Royal Economic Society, vol. 97(387), pages 718-726, September.
    16. Douglas S. Massey, 1990. "The Social and Economic Origins of Immigration," The ANNALS of the American Academy of Political and Social Science, , vol. 510(1), pages 60-72, July.
    17. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    18. K B Newbold, 1996. "Income, Self-Selection, and Return and Onward Interprovincial Migration in Canada," Environment and Planning A, , vol. 28(6), pages 1019-1034, June.
    19. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
    20. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-740, November.
    21. Enchautegui, Maria E, 1997. "Welfare Payments and Other Economic Determinants of Female Migration," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 529-554, July.
    22. Katz, Eliakim & Stark, Oded, 1984. "Migration and Asymmetric Information: Comment," American Economic Review, American Economic Association, vol. 74(3), pages 533-534, June.
    23. Goodman, Allen C. & Kawai, Masahiro, 1986. "Functional form, sample selection, and housing demand," Journal of Urban Economics, Elsevier, vol. 20(2), pages 155-167, September.
    24. Molho, Ian, 1986. "Theories of Migration: A Review," Scottish Journal of Political Economy, Scottish Economic Society, vol. 33(4), pages 396-419, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seong Woo Lee & Dowell Myers & Seong‐Kyu Ha & Hae Ran Shin, 2005. "What If Immigrants Had Not Migrated?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(2), pages 609-636, April.
    2. Jeroen Smits, 2001. "Career Migration, Self-selection and the Earnings of Married Men and Women in the Netherlands, 1981-93," Urban Studies, Urban Studies Journal Limited, vol. 38(3), pages 541-562, March.
    3. Maoyong Fan & Susan Gabbard & Anita Alves Pena & Jeffrey M. Perloff, 2015. "Why Do Fewer Agricultural Workers Migrate Now?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(3), pages 665-679.
    4. Aydemir, Abdurrahman, 2002. "Effects of Selection Criteria and Economic Opportunities on the Characteristics of Immigrants," Analytical Studies Branch Research Paper Series 2002182e, Statistics Canada, Analytical Studies Branch.
    5. Consuelo Abellán-Colodrón, 1998. "Ganancia salarial esperada como determinante de la decisión individual de emigrar," Investigaciones Economicas, Fundación SEPI, vol. 22(1), pages 93-117, January.
    6. Haapanen, Mika, 2002. "Variation of migration behaviour in population," ERSA conference papers ersa02p283, European Regional Science Association.
    7. Brian Cushing & Jacques Poot, 2004. "Crossing boundaries and borders: Regional science advances in migration modelling," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 317-338, Springer.
    8. Chiswick, Barry R., 1999. "Are Immigrants Favorably Self-Selected? An Economic Analysis," Working Papers 147, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    9. Sari Pekkala & Hannu Tervo, 2002. "Unemployment and Migration: Does Moving Help?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 621-639, December.
    10. Barry R. Chiswick, 1999. "Are Immigrants Favorably Self-Selected? An Economic Analysis," University of Chicago - George G. Stigler Center for Study of Economy and State 147, Chicago - Center for Study of Economy and State.
    11. Haapanen, Mika, 2000. "Impact Of Expected Earnings On Interregional Migration Decisions In Finland," ERSA conference papers ersa00p269, European Regional Science Association.
    12. Ekaterina Sprenger, 2013. "The Determinants of International Migration in the European Union: An Empirical Analysis," Working Papers 325, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    13. Sari Pekkala, 2002. "Migration and Individual Earnings in Finland: A Regional Perspective," Regional Studies, Taylor & Francis Journals, vol. 36(1), pages 13-24.
    14. Uebelmesser Silke, 2006. "To Go or Not to Go: Emigration from Germany," German Economic Review, De Gruyter, vol. 7(2), pages 211-231, May.
    15. Cristina Procházková Ilinitchi, 2010. "Selected Migration Theories and their Importance on Drawing Migration Policies [Vybrané teorie migrace a jejich význam při vytváření migračních politik]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2010(6), pages 3-26.
    16. Arland Thornton & Prem Bhandari & Jeffrey Swindle & Nathalie Williams & Linda Young-DeMarco & Cathy Sun & Christina Hughes, 2020. "Fatalistic Beliefs and Migration Behaviors: A Study of Ideational Demography in Nepal," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(4), pages 643-670, August.
    17. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
    18. Jean-Louis Arcand & Linguère M'Baye, 2011. "Braving the waves: The economics of clandestine migration from Africa," CERDI Working papers halshs-00575606, HAL.
    19. Kazi Abdul, Mannan & V.V, Kozlov, 2001. "The Cost-Benefit Analysis of International Migration: Modelling and Empirical Study between Bangladesh and Italy," MPRA Paper 103479, University Library of Munich, Germany, revised 2001.
    20. Klaus Nowotny & Robert Hierländer, 2009. "FAMO – Fachkräftemonitoring. Regelmäßige Erhebung des Angebots und des Bedarfs an Fachkräften in der Grenzregion Ostösterreichs mit der Slowakei. FAMO I: Migrations- und Pendelpotentiale in Wien und d," WIFO Studies, WIFO, number 37422.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:8:p:214-:d:1461031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.