The Self Selection of Migrant Workers Revisited

Eran Yashiv ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Work of low-skilled migrant workers from developing countries in developed economies is a growingphenomenon and a key political and economic issue. An extensive literature has found (for the mostpart) that these workers come from the lower part of the skill distribution. This paper revisits theissue, using a self-selection model, a unique data-set on migrant workers as well as on workers thatchose not to migrate ('stayers'), and direct estimation of the moments of the latent unobserved skilldistributions. The main findings are that there are two dimensions to self-selection: in terms ofobserved skills, a substantial migration premium lures migrant workers, while very low returns toskills in the foreign economy deter skilled workers, leading to negative self-selection. In terms ofunobservable skills, self-selection is found to be positive rather than negative. The latter findingentails substantial increases in mean wages and reduction in wage inequality, relative to randomassignment and to the alternative of not migrating. The analysis also demonstrates that estimates ofskill premia for migrants — an important issue in the immigration literature — are upward biased ifselection is not accounted for. Relevant skills are multi-dimensional, hence assignments in thiscontext are non-hierarchical.

Keywords: self-selection; migrant workers; skill premia; migration premium; unobservable skills; non-hierarchical sorting; wage inequality. (search for similar items in EconPapers)
JEL-codes: F2 J3 J6 (search for similar items in EconPapers)
Date: 2004-10
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: The self selection of migrant workers revisited (2004)
Working Paper: The Self-Selection of Migrant Workers Revisited (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0655

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