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Semiparametric analysis of German East-West migration intentions: Facts and theory

Michael Christopher Burda (), Wolfgang Karl Härdle, Marlene Müller () and Axel Werwatz

No 1998,3, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: East-West migration in Germany peaked at the beginning of the 90s although the average wage gap between Eastern and Western Germany continues to average about 25%. We analyze the propensity to migrate using microdata from the German Socioeconomic Panel. Fitting a parametric Generalized Linear Model (GLM) yields nonlinear residual behavior. This finding is not compatible with classical Marshallian theory of migration and motivates the semiparametric analysis. We estimate a Generalized Partial Linear Model (GPLM) where some components of the index of explanatory variables enter nonparametrically. We find the estimate of the nonparametric inuence in concordance with a number of alternative migration theories, including the recently proposed option-value-of-waiting theory. --

Date: 1997
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