A land of milk and honey with streets paved with gold: do emigrants have over-optimistic expectations about incomes abroad ?
David McKenzie,
John Gibson and
Steven Stillman
No 4141, Policy Research Working Paper Series from The World Bank
Abstract:
Millions of people emigrate every year in search of better economic and social opportunities. Anecdotal evidence suggests that emigrants may have over-optimistic expectations about the incomes they can earn abroad, resulting in excessive migration pressure, and in disappointment among those who do migrate.Yet there is almost no statistical evidence on how accurately these emigrants predict the incomes that they will earn working abroad. In this paper the authors combine a natural emigration experiment with unique survey data on would-be emigrants'probabilistic expectations about employment and incomes in the migration destination. Their procedure enables them to obtain moments and quantiles of the subjective distribution of expected earnings in the destination country. The authors find a significant underestimation of both unconditional and conditional labor earnings at all points in the distribution. This underestimation appears driven in part by potential migrants placing too much weight on the negative employment experiences of some migrants, and by inaccurate information flows from extended family, who may be trying to moderate remittance demands by understating incomes.
Keywords: Population Policies; Economic Theory&Research; Remittances; Labor Markets; Fiscal&Monetary Policy (search for similar items in EconPapers)
Date: 2007-03-01
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)
Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/wps4141.pdf (application/pdf)
Related works:
Journal Article: A land of milk and honey with streets paved with gold: Do emigrants have over-optimistic expectations about incomes abroad? (2013) 
Working Paper: A land of milk and honey with streets paved with gold: Do emigrants have over-optimistic expectations about incomes abroad? (2007) 
Working Paper: A Land of Milk and Honey with Streets Paved with Gold: Do Emigrants Have Over-Optimistic Expectations about Incomes Abroad? (2007) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4141
Access Statistics for this paper
More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().