Testing Classic Theories of Migration in the Lab

Catia Batista and David McKenzie

No 9751, Policy Research Working Paper Series from The World Bank

Abstract: The predictions of different classic migration theories are tested by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. First, the authors test theories of income maximization, migrant skill-selection, and multi-destination choice as they vary migration costs, liquidity constraints, risk, social benefits, and incomplete information. The standard income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, these lab experiments are used to investigate whether the independence of irrelevant alternatives assumption holds. The results show that it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once the risk of unemployment and incomplete information is added, independence of irrelevant alternatives no longer holds for about 20 percent of the sample.

Keywords: Employment and Unemployment; Educational Sciences; Social Cohesion; International Trade and Trade Rules (search for similar items in EconPapers)
Date: 2021-08-17
New Economics Papers: this item is included in nep-exp and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://documents.worldbank.org/curated/en/75131162 ... ation-in-the-Lab.pdf (application/pdf)

Related works:
Journal Article: Testing classic theories of migration in the lab (2023)
Working Paper: Testing Classic Theories of Migration in the Lab (2021)
Working Paper: Testing Classic Theories of Migration in the Lab (2021)
Working Paper: Testing Classic Theories of Migration in the Lab (2021)
Working Paper: Testing classic theories of migration in the lab (2021)
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