Estimating Immigrant Earnings Profiles When Migrations are Temporary

29 Pages Posted: 22 Jun 2016

See all articles by Christian Dustmann

Christian Dustmann

University College London; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Joseph-Simon Goerlach

Bocconi; Centre for Economic Policy Research (CEPR)

Date Written: May 30, 2016

Abstract

The assumption that all migrations are permanent, which pervaded the early microdata-based research on immigrant career profiles, is not supported by the empirical evidence. Rather, many – if not most – migrations appear to be temporary. In this paper, therefore, we illustrate the estimation challenges when migrations are temporary. As in an overwhelming share of the selective out-migration literature, our basic structure assumes that the process that determines out-migration is unrelated to other choices that affect wage growth, such as human capital investment or labour supply decisions, which greatly simplifies the analysis. When the choice of whether and when to out-migrate also affects decisions that determine wage growth, the problem becomes inherently dynamic and requires a more structural approach to estimation, which we briefly discuss.

Keywords: immigration, return migration, assimilation, earnings profile, selection

JEL Classification: F220, J150, J310, J610, O150

Suggested Citation

Dustmann, Christian and Goerlach, Joseph-Simon, Estimating Immigrant Earnings Profiles When Migrations are Temporary (May 30, 2016). CESifo Working Paper Series No. 5919, Available at SSRN: https://ssrn.com/abstract=2799187 or http://dx.doi.org/10.2139/ssrn.2799187

Christian Dustmann (Contact Author)

University College London ( email )

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Centre for Economic Policy Research (CEPR)

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Centre for Economic Policy Research (CEPR) ( email )

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