Direct Evidence on Risk Attitudes and Migration

David Jaeger, Holger Bonin (holger.bonin@ihs.ac.at), Thomas Dohmen, Armin Falk, David Huffman and Uwe Sunde

No 50, Working Papers from Department of Economics, College of William and Mary

Abstract: Geographic mobility is important for the functioning of labor markets because it brings labor resources to where they can be most efficiently used. It has long been hypothesized that individuals' migration propensities depend on their attitudes towards risk, but the empirical evidence, to the extent that it exists, has been indirect. In this paper, we use newly available data from the German Socio-Economic Panel to measure directly the relationship between migration propensities and attitudes towards risk. We find that individuals who are more willing to take risks are more likely to migrate between labor markets in Germany. This result is robust to stratifying by age, sex, education, national origin, and a variety of other demographic characteristics, as well as to the level of aggregation used to define geographic mobility. The effect is substantial relative to the unconditional migration propensity and compared to the conventional determinants of migration. We also find that being more willing to take risks is more important for the extensive than for the intensive margin of migration.

Keywords: risk aversion; migration; Germany (search for similar items in EconPapers)
JEL-codes: D81 J61 R23 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-03-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://economics.wm.edu/wp/cwm_wp50.pdf (application/pdf)

Related works:
Journal Article: Direct Evidence on Risk Attitudes and Migration (2010)
Working Paper: Direct evidence on risk attitudes and migration (2010)
Working Paper: Direct evidence on risk attitudes and migration (2008)
Working Paper: Direct Evidence on Risk Attitudes and Migration (2007)
Working Paper: Direct Evidence on Risk Attitudes and Migration (2007)
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