The Long-Term Impact of International Migration on Economic Decision-Making: Evidence from a Migration Lottery and Lab-in-The-Field Experiments

44 Pages Posted: 6 Oct 2016

See all articles by John Gibson

John Gibson

University of Waikato; Motu Economic and Public Policy Research

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Halahingano Rohorua

University of Waikato

Steven Stillman

Free University of Bozen-Bolzano; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 3, 2016

Abstract

This paper studies how migration from a poor to a rich country affects key economic beliefs, preference parameters, and transnational household decision-making efficiency. The setting is the migration of Tongans to New Zealand through a migration lottery program. In a 10-year follow-up survey of individuals applying for this program, the study elicited risk and time preferences and pro-market beliefs. It also linked migrants and potential migrants to a partner household consisting of family members who would stay behind if the migrants moved. Survey participants played lab-in-the-field games designed to measure the degree of intra-family trust and the efficiency of intra-family decision-making. Migration provides a large and permanent positive shock to income, a large change in economic institutions, and a reduction in interactions with partner household members. Despite these changes, the study finds no significant impacts of migration on risk and time preferences, pro-market beliefs, or the decision-making efficiency of transnational households. This stability in the face of such a large and life-changing event lends credence to economic models of migration that treat these determinants of decision-making as time-invariant, and contrasts with recent evidence on preference changes after negative shocks.

Suggested Citation

Gibson, John and McKenzie, David John and Rohorua, Halahingano and Stillman, Steven, The Long-Term Impact of International Migration on Economic Decision-Making: Evidence from a Migration Lottery and Lab-in-The-Field Experiments (October 3, 2016). World Bank Policy Research Working Paper No. 7848, Available at SSRN: https://ssrn.com/abstract=2848476

John Gibson (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Motu Economic and Public Policy Research

19 Milne Terrace
Island Bay
Wellington, 6002
New Zealand

David John McKenzie

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Halahingano Rohorua

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Steven Stillman

Free University of Bozen-Bolzano ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
26
Abstract Views
404
PlumX Metrics