Temporary and Permanent Migrant Selection: Theory and Evidence of Ability-Search Cost Dynamics

45 Pages Posted: 5 Mar 2016

See all articles by Joyce J. Chen

Joyce J. Chen

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

Katrina Kosec

International Food Policy Research Institute (IFPRI)

Valerie Mueller

International Food Policy Research Institute (IFPRI)

Multiple version iconThere are 3 versions of this paper

Date Written: December 30, 2015

Abstract

The migrant selection literature concentrates primarily on spatial patterns. We integrate two workhorses of the labor literature, the Roy and search models, to illustrate the implications of migration duration for patterns of selection. Theory and empirics show that temporary migrants are intermediately selected on education, with weaker selection on cognitive ability. Longer migration episodes lead to stronger positive selection on both education and ability because the associated jobs involve finer employee-employer matching and offer greater returns to experience. Networks are more valuable for permanent migration, where search costs are higher. Labor market frictions explain observed complex network-skill interactions. When considering migrant selection, the economics literature has largely focused on patterns by area of origin. However, the duration of migration episodes – temporary versus permanent – is another important determinant of selection. We integrate two workhorses of the labor literature, the Roy model and a search model, to illustrate the implications of migration duration for patterns of self-selection. We provide theoretical and empirical evidence showing that, because short-term migration episodes have less scope for skill-based matching and greater need for screening, temporary migrants are more likely to display intermediate selection on education, with weaker selection on underlying cognitive ability. Longer term migration episodes, in contrast, allow for finer employee-employer matching and greater returns to experience, leading to stronger positive selection on both education and cognitive ability among permanent migrants. Networks are also found to be more valuable for permanent migration, where search costs tend to be higher. However, we also provide evidence of complex network-skill interactions, driven primarily by labor market frictions.

Keywords: Pakistan; south Asia; Asia; migration; labor markets; income; search costs; networks

JEL Classification: J61; O15

Suggested Citation

Chen, Joyce J. and Kosec, Katrina and Mueller, Valerie, Temporary and Permanent Migrant Selection: Theory and Evidence of Ability-Search Cost Dynamics (December 30, 2015). IFPRI Discussion Paper 1496, Available at SSRN: https://ssrn.com/abstract=2741921 or http://dx.doi.org/10.2139/ssrn.2741921

Joyce J. Chen (Contact Author)

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States

HOME PAGE: http://www.aede.osu.edu/people/chen.1276

Katrina Kosec

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Valerie Mueller

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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