A Life-Cycle Model of Outmigration and Economic Assimilation of Immigrants in Germany

Charles Bellemare ()

No 1012, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper estimates a structural dynamic life-cycle model of outmigration where, in each period, immigrants choose whether to work in the host country, not to work but remain in the host country, or outmigrate. The model incorporates several features of existing life-cycle theories of outmigration but distinguishes itself by introducing uncertainty in about future earnings and preferences which allows immigrants to revise their duration decisions throughout their migration experience. We overcome the problem of not directly observing outmigration movements by using panel attrition as a proxy variable and use a simple method to correct for the fact that part of the attrition is not a consequence of outmigration. Estimates are used to predict changes in life-cycle patterns of outmigration behavior. Estimation results indicate that outmigration does not depend exclusively on earnings differentials. Estimated assimilation rates are found to be robust to selection effects. Immigrants are found to be forward looking decision makers, and simulations show that predicted migration durations are very sensitive to changes in their economic environment and differ considerably from those of a myopic model.

Keywords: structural dynamic programming models; outmigration (search for similar items in EconPapers)
JEL-codes: C61 J61 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2004-02
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: European Economic Review, 2007, 51 (3), 553-576

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Related works:
Journal Article: A life-cycle model of outmigration and economic assimilation of immigrants in Germany (2007)
Working Paper: A Life-Cycle Model of Outmigration and Economic Assimilation of Immigrants in Germany (2004)
Working Paper: A Life-Cycle Model of Outmigration and Economic Assimilation of Immigrants in Germany (2004)
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