Immigrants' Wage Growth and Selective Out-Migration

Govert Bijwaard and Jackline Wahba

No 8627, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines immigrant wage growth taking into account selective out-migration using administrative data from the Netherlands. We also take into account the potential endogeneity of the immigrants' labor supply and their out-migration decisions on their earning profiles using a correlated competing risk model, but we also use standard estimations as done in previous literature. We distinguish between two types of migrants: labor and family migrants given their different labor market and out-migration behavior. We find that simple models lead to biased estimates of the wage growth of immigrants. Controlling for the selective out-migration and endogeneity of labor supply, we find that labor out-migrants are positively selected but family out-migrants are negatively selected. Furthermore, the findings underscore the importance of taking into account the endogeneity of labor supply and out-migration when estimating immigrants' wage growth.

Keywords: competing risks; labor market transitions; migration dynamics; immigrant assimilation; income growth (search for similar items in EconPapers)
JEL-codes: C41 F22 J61 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014-11
New Economics Papers: this item is included in nep-lab, nep-lma, nep-mig and nep-ure
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Forthcoming - published in: Oxford Bulletin of Economics and Statistics, 2019, 81, 1065-1094

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Journal Article: Immigrants’ Wage Growth and Selective Out‐Migration (2019)
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