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Return Migrants and the Wage Premium: Does the Legal Status of Migrants Matter?

Jackline Wahba () and Nelly El-Mallakh

No 1133, Working Papers from Economic Research Forum

Abstract: This paper examines the long-term impact of the legal status of overseas temporary migrants. Using unique data from Egypt, where we are able to distinguish between return migrants according to their type of international migration, documented versus undocumented migration, we examine the impact of temporary migration on their wages after return. Relying on a recursive mixed process model which takes into account the double selection into temporary migration and into the legal status of migrants, we examine the effect of illegal status on wages upon return. We find that undocumented migrants witness a wage penalty compared to documented migrants upon return. Our results also suggest that there is no wage penalty nor a wage premium for undocumented migrants compared to stayers. We also find suggestive evidence that undocumented migrants had lower-ranked occupations overseas and had lower earnings and lower savings overseas. Our results are the first to show the long term negative impact of undocumented migration on the migrant even after returning to their country of origin.

New Economics Papers: this item is included in nep-dev and nep-mig
Date: 2017, Revised 2017
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Published by The Economic Research Forum (ERF)

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