Migration, Family, and Risk Diversification
Shin-Hwang Chiang and
Siu Leung ()
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Shin-Hwang Chiang: York University, Canada
Working Papers from York University, Department of Economics
This paper proposes a formal model of migration in which workers are heterogeneous and markets are stochastically correlated. We derive and characterize the optimal migration pattern of a family. It is shown to depend on differences in expected earnings, costs of migration, income risks, and more importantly market correlations. We show that migration can take place even when migrants earn less abroad and, more surprisingly, when earnings in the foreign country are riskier for every member of the family. Moreover, it may well be an optimal arrangement to have only dependents migrate, thus rationalizing the recent dependent-oriented migration flows from places like Hong Kong and Taiwan. We also provide some evidence in support of our theory.
Keywords: Migration; Emigration; Family; Risk Diversification; Dependents (search for similar items in EconPapers)
JEL-codes: D81 F22 (search for similar items in EconPapers)
Pages: 39 pages
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http://dept.econ.yorku.ca/research/workingPapers/working_papers/migr3.pdf First version, 2002
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Journal Article: Migration, Family, and Risk Diversification (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:yca:wpaper:2002_01
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