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Testing classic theories of migration in the lab

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  • Catia Batista
  • David McKenzie

Abstract

We test the predictions of different classic migration theories by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. We test theories of income maximization, migrant skill-selection, and multidestination choice as we vary migration costs, liquidity constraints, risk, social benefits, and incomplete information. We show the standard income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, we investigate whether the independence of irrelevant alternatives (IIA) assumption holds. We find it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once we add a risk of unemployment and incomplete information, IIA no longer holds for about 20 percent of our sample.

Suggested Citation

  • Catia Batista & David McKenzie, 2021. "Testing classic theories of migration in the lab," NOVAFRICA Working Paper Series wp2111, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    • Handle: RePEc:unl:novafr:wp2111
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    References listed on IDEAS

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    Cited by:

    1. Batista, Catia & McKenzie, David, 2023. "Testing classic theories of migration in the lab," Journal of International Economics, Elsevier, vol. 145(C).
    2. Didier Ruedin, 2021. "Decision-Making Under Uncertainty: African Migrants in the Spotlight," Social Inclusion, Cogitatio Press, vol. 9(1), pages 182-185.
    3. Bah, Tijan L. & Batista, Catia & Gubert, Flore & McKenzie, David, 2023. "Can information and alternatives to irregular migration reduce “backway” migration from The Gambia?," Journal of Development Economics, Elsevier, vol. 165(C).
    4. repec:grz:wpsses:2021-02 is not listed on IDEAS
    5. Catia Batista & David Costa & Pedro Freitas & Goncalo Lima & Ana Reis, 2024. "What Matters for the Decision to Study Abroad? A Lab-in-the-Field Experiment in Cape Verde," RF Berlin - CReAM Discussion Paper Series 2413, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    6. Jules Gazeaud & Eric Mvukiyehe & Olivier Sterck, 2023. "Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial," The Review of Economics and Statistics, MIT Press, vol. 105(1), pages 143-157, January.
    7. Catia Batista & Pedro C. Vicente, 2018. "Is mobile money changing rural Africa? Evidence from a field experiment," NOVAFRICA Working Paper Series wp1805, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    8. Frohnweiler, Sarah & Beber, Bernd & Ebert, Cara, 2022. "Information Frictions, Belief Updating and Internal Migration: Evidence from Ghana and Uganda," IZA Discussion Papers 15826, Institute of Labor Economics (IZA).
    9. Tijan L. Bah & Cátia Batista, 2018. "Understanding willingness to migrate illegally: Evidence from a lab in the field experiment," NOVAFRICA Working Paper Series wp1803, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.

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    More about this item

    Keywords

    Migrant selection; destination choice; lab experiment; IIA;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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