Rationality of Post-Accession Migration

Katarzyna Budnik ()

Focus on European Economic Integration, 2009, issue 1, 57-83

Abstract: Given large-scale Polish migration to the U.K. following EU enlargement in 2004, this study evaluates market efficiency in sorting Polish-born workers to the locations offering the highest returns to their skills. To establish whether Polish workers that emigrated to the U.K. did so on rational premises, wage regressions are run to identify the wage gains individuals may have expected to realize when migrating and when staying; and the Heckman (1979) self-selection model is used to tie up the migration decision with the decision to work and to identify returns to unobservable skills (e.g. motivation). Whereas the results support the rationality of migration from Poland to the U.K. (those who left gained in nominal and real terms), they are less conclusive about the optimality of staying (some of those who stayed might have earned more abroad). The outcomes suggest that the anticipated wage gains do not fully explain the intensity of observed migration and underline the importance of including nonincome factors, i.e. social costs, in exploring post-accession migration.

Date: 2009
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