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Financial Constraints, Endogenous Educational Choices and Self-Selection of Migrants

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  • Juliano Assuncao
  • Leandro Carvalho

Abstract

The Roy model predicts that migrants will be disproportionately drawn from the lower half of the educational distribution of the sending country if the sending country has a higher return to schooling. However, Mexican immigrants in the U.S. tend to be disproportionately drawn from the middle of the distribution. This paper argues that financial constraints may explain why. It studies migrants' selectivity when agents that face credit constraints make joint decisions about how much to invest in education and whether to migrate. The results show that financial constraints can explain the intermediate selection of migrants observed in the data.

Suggested Citation

  • Juliano Assuncao & Leandro Carvalho, 2010. "Financial Constraints, Endogenous Educational Choices and Self-Selection of Migrants," Working Papers WR-758, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-758
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    Cited by:

    1. Clemens, Michael A. & Mendola, Mariapia, 2020. "Migration from Developing Countries: Selection, Income Elasticity, and Simpson's Paradox," IZA Discussion Papers 13612, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    migration; financial constraints; self-selection; human capital;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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