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International Migration with Heterogeneous Agents: Theory and Evidence for Germany, 1967-2009

Herbert Brücker () and Philipp J.H. Schroeder
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Philipp J.H. Schroeder: Aarhus School of Business and DIW Berlin.

Authors registered in the RePEc Author Service: Philipp J.H. Schröder

No 2011027, Norface Discussion Paper Series from Norface Research Programme on Migration, Department of Economics, University College London

Abstract: Temporary migration, though empirically relevant, is often ignored in formal models. This paper proposes a migration model with heterogeneous agents and persistent cross country income differentials that features temporary migration. In equilibrium there exists a positive relation between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, existing empirical migration models, estimating net migration flows, instead of stocks, may be misspecified. This suspicion appears to be confirmed by our investigation of the cointegration relationships of German migration stocks and flows since 1967. We find that (i) panel-unit root tests reject the hypothesis that migration flows and the explanatory variables are integrated of the same order, while migration stocks and the explanatory variables are all I(1) variables, and (ii) the hypothesis of cointegration cannot be rejected for the stock model.

Keywords: International migration; temporary migration; panel cointegration (search for similar items in EconPapers)
JEL-codes: C23 C53 F22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-mig
Date: 2011-12
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Journal Article: International Migration With Heterogeneous Agents: Theory and Evidence for Germany, 1967–2009 (2012) Downloads
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