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Self-Selection in Migration and Returns to Skills

Author

Listed:
  • Benoit Dostie
  • Pierre Thomas Léger
Abstract
Several papers have tested the empirical validity of the migration models proposed by Borjas (1987) and Borjas, Bronars, and Trejo (1992). However, to our knowledges, none has been able to disentangle the separate impact of observable and unobservable individual characteristics, and their respective returns across different locations, on an individual's decision to migrate. We build a model in which individuals sort, in part, on potential earnings - where earnings across different locations are a function of both observable and unobservable characteristics. We focus on the inter-provincial migration patterns of Canadian physicians. We choose this particular group for several reasons including the fact that they are paid on a fee-for-service basis. Since wage rates are exogenous, earning differentials are driven by differences in productivity. We then estimate a mixed conditional-logit model to determine the effects of individual and destination-specific characteristics (particularly earnings differentials) on physician location decisions. We find, among other things, that high-productivity physicians (based on unobservables) are more likely to migrate to provinces where the productivity premium is greater, while low-productivity physicians are more likely to migrate to areas where the productivity premium is lower. These results are consistent with a modified Borjas model of self-selection in migration based on both unobservables and observables.

Suggested Citation

  • Benoit Dostie & Pierre Thomas Léger, 2006. "Self-Selection in Migration and Returns to Skills," Cahiers de recherche 0612, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0612
    as

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    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2006/CIRPEE06-12.pdf
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    References listed on IDEAS

    as
    1. Gary L. Hunt & Richard E. Mueller, 2004. "North American Migration: Returns to Skill, Border Effects, and Mobility Costs," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 988-1007, November.
    2. 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.
    3. Borjas, George J. & Bronars, Stephen G. & Trejo, Stephen J., 1992. "Self-selection and internal migration in the United States," Journal of Urban Economics, Elsevier, vol. 32(2), pages 159-185, September.
    4. Dionne, Georges & Langlois, Alain & Lemire, Nicole, 1987. "More on the geographical distribution of physicians," Journal of Health Economics, Elsevier, vol. 6(4), pages 365-374, December.
    5. Satu Nivalainen, 2004. "Determinants of family migration: short moves vs. long moves," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 157-175, February.
    6. Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-235, May.
    7. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    Migration; Self-Selection; Earnings; Longitudinal Data; Productivity;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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