The Impact of Information on Migration Outcomes

Abstract

This paper presents a model of migration in which migration decisions are made with incomplete information on the labor market conditions at destination. It provides an explanation for how differences in the level of information about the destination can bring about differences in economic outcomes related to migration, such as the migration propensity and the return to migration. The implications of the model show the conditions under which information positively and negatively affects these outcomes. Thus, the model can be used to explain a wide set of empirical findings regarding the relationship between information and migration outcomes. 2005 CPS data are used to estimate the econometric model. The estimation results suggest that increased access to information regarding destination labor markets increases one's likelihood to migrate to another state. Furthermore, the findings suggest that people who have more information regarding the destination at the time of their migration decision on average experience higher returns to migration.

Keywords: migration, incomplete information, return to migration

JEL Classification: J61