Financial constraints, migration and inequality

Juliano Assuncao and Leandro S. Carvalho
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Leandro S. Carvalho: Department of Economics Princeton University

No 498, Textos para discussão from Department of Economics PUC-Rio (Brazil)

Abstract: Although the self-selection of emigrants is determined by di¤erences in the returns to education, according to the celebrated Roy model, empirical evidence suggests that migrants tend to be favorably selected. This paper argues that financial con- straints might be useful to explain this controversy. These constraints might impose positive correlations between (i) wealth and education, and (ii) wealth and migra- tion, implying a positive bias in the empirical results. We also show that high levels of migration premium and return to education in the source country explain the migration of middle-class individuals, a situation in which migration increases in- equality in the home country.

Keywords: migration; financial constraints; self-selection; human capital (search for similar items in EconPapers)
Pages: 28p. JEL Code: O15, O16, R23
Date: 2005-02
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rio:texdis:498

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