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International Migration with Heterogeneous Agents: Theory and Evidence

Author

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  • Brücker, Herbert

    (Institute for Employment Research (IAB), Nuremberg)

  • Schröder, Philipp J. H.

    (Aarhus University)

Abstract

International migration is characterized by two puzzling facts: First, only a small share of the population tends to migrate although substantial and persisting income differences across countries exist. Second, net migration rates tend to cease over time despite persisting income differences. This paper addresses these issues in a migration model with heterogeneous agents that features temporary migration. In equilibrium a positive relation exists between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, existing empirical migration models, estimating net migration flows instead of stocks, may be misspecified. This suspicion appears to be confirmed by our empirical investigation of the cointegration relationships of German migration stocks and flows since 1967. We find that (i) panel-unit root tests reject the hypothesis that migration flows and the explanatory variables are integrated of the same order, while migration stocks and the explanatory variables are all I(1) variables, and (ii) the hypothesis of cointegration cannot be rejected for the stock model.

Suggested Citation

  • Brücker, Herbert & Schröder, Philipp J. H., 2006. "International Migration with Heterogeneous Agents: Theory and Evidence," IZA Discussion Papers 2049, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2049
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    Cited by:

    1. Thierry Baudassé & Rémi Bazillier, 2010. "Migration and Trade Union Rights," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 677-707, December.
    2. Jakob von Weizsäcker & Alan Ahearne & Zsolt Darvas & Herbert Brücker, 2009. "Cyclical dimensions of labour mobility after EU Enlargement," Bruegel Working Papers 305, Bruegel.
    3. Slobodan Djajić, 2014. "Temporary Migration and the Flow of Savings to the Source Country," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 162-176, February.
    4. Michel Beine & Frédéric Docquier & Çağlar Özden, 2010. "Diaspora Effects in International Migration: Key Questions and Methodological Issues," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 639-659, December.
    5. Brücker, Herbert & Fachin, Stefano & Venturini, Alessandra, 2011. "Do foreigners replace native immigrants? A panel cointegration analysis of internal migration in Italy," Economic Modelling, Elsevier, vol. 28(3), pages 1078-1089, May.
    6. Thierry Baudassé & Rémi Bazillier, 2011. "Gender Discrimination and Emigration: Push Factor Versus Screening Process Hypothesis," Working Papers halshs-00829499, HAL.
    7. Thierry Baudassé & Rémi Bazillier, 2014. "Gender inequality and emigration: Push factor or selection process?," International Economics, CEPII research center, issue 139, pages 19-47.
    8. Wadim Strielkowski, 2007. "A Living Worth Leaving? Economic Incentives and Migration Flows: The Case of Czechoslovak Labour Migration," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(3), pages 252-264.
    9. Michael Landesmann & Isilda Mara & Hermine Vidovic, 2015. "SEE 2020 Strategy: Study on Labour Mobility," wiiw Research Reports 408, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    Keywords

    temporary migration; international migration; panel cointegration;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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