The Selection of Migrants and Returnees: Evidence from Romania and Implications

Abstract

This paper uses census and survey data to identify the wage earning ability and the selectivity of recent Romanian migrants and returnees. We construct measures of selection across skill groups and estimate the average and the skills-specific premium for migration and return for three typical destinations of Romanian migrants after 1990. We find evidence for a sorting of migrants consistent with skill compensation in destination countries. The premium to return migration increases with migrants' skills and drives the positive selection of returnees. Based on the rationality of these migration decisions, a model of education, migration and return predicts positive long-run effects of increased migration for average skills and wages in Romania.