The Effects of Cognitive and Noncognitive Skills on Migration Decisions.

56 Pages Posted: 23 Sep 2017

See all articles by Aline Butikofer

Aline Butikofer

Norwegian School of Economics (NHH) - Department of Economics

Giovanni Peri

University of California, Davis - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 19, 2017

Abstract

There is growing evidence that cognitive and noncognitive skills affect the economic and social outcomes of individuals. In this paper, we analyze how they affect the migration decisions of individuals during their lifetimes. We use data that combine military enlistment and administrative records for the male population born in 1932 and 1933 in Norway. Records of interviews with a psychologist at age 18 allow us to construct an index of 'sociability' and 'adaptability' for each individual, as well as an index of cognitive ability, the intelligence quotient. We find that adaptability and cognitive ability have significant and positive impacts on the probability of an individual migrating out of his area, whether this involves rural, urban, long distance, or international migration. Adaptability has a particularly strong impact on migration for individuals with low cognitive skills, implying a strong positive selection of less educated migrants with respect to the (previously unobserved) adaptability skill. We also show that cognitive skills have a strong positive effect on the pre- and post-migration wage differential, whereas adaptability has no significant effect. Moreover, individuals with high cognitive ability migrate to areas with large wage returns to cognitive abilities, whereas this is not true for individuals with high adaptability. This evidence suggests that adaptability reduces the psychological cost of migrating, whereas cognitive skills increase the monetary returns associated with migration.

Keywords: Noncognitive Skills; Mobility Costs; Returns to Migration

JEL Classification: J61, J24, R23

Suggested Citation

Butikofer, Aline and Peri, Giovanni, The Effects of Cognitive and Noncognitive Skills on Migration Decisions. (September 19, 2017). NHH Dept. of Economics Discussion Paper No. 17/2017. Available at SSRN: https://ssrn.com/abstract=3041090 or http://dx.doi.org/10.2139/ssrn.3041090

Aline Butikofer (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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