The decision to migrate: A simultaneous decision making approach

Talat Mahmood and Klaus Schömann

Discussion Papers, Research Unit: Competition and Innovation from WZB Berlin Social Science Center

Abstract: Discrete choice models are used to investigate the individual’s choice among a discrete number of alternatives. The characteristics of each alternative, by means of multinomial and nested multinomial models, have been taken into account. Specifically, this study analyses the impact of choice-specific characteristics (economic and socio-political attributes) in a model of choice between different country locations. Individual IT-graduates are assumed to choose a single type of move, stay-home or go-abroad, while simultaneously choosing a country of their choice. We demonstrate that a nested logit model is appropriate on both theoretical and empirical grounds. The sample consists of 1,500 IT-graduates from India. The results show on the one hand a high migration propensity for foreign destinations and on the other hand a quite large number of IT-Graduates who want to stay at home. By comparing the direct elasticities (at branch level) of home with those of foreign destination types we observe that both the economic as well as socio-political factors tend to have a greater impact for the foreign destinations. Based on the cross elasticities values, a location comparison between the destinations Germany and the USA/Canada shows that the magnitude of the values of elasticities are found to be higher for North American countries than for Germany. This suggests that IT-Graduates evaluate the economic as well as the socio-political factors as more important and significantly higher for North American destinations than for Germany. In addition we find strong evidence for a competition between countries with high potentials, with India emerging as an attractive location.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbcin:spii200917

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