Self-Employment and Migration

72 Pages Posted: 23 Sep 2019

See all articles by Samuele giambra

Samuele giambra

Brown University

David J. McKenzie

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

Abstract

There is a widespread policy view that a lack of job opportunities at home is a key reason for migration, accompanied by suggestions of the need to spend more on creating these opportunities so as to reduce migration. Self-employment is widespread in poor countries, and faced with a lack of existing jobs, providing more opportunities for people to start businesses is a key policy option. But empirical evidence to support this idea is slight, and economic theory offers several reasons why the self-employed may in fact be more likely to migrate. We put together panel surveys from eight countries to descriptively examine the relationship between migration and self-employment, finding that the self-employed are indeed less likely to migrate than either wage workers or the unemployed. We then analyze seven randomized experiments that increased self-employment, and find their causal impacts on migration are negative on average, but often small in magnitude.

Keywords: internal migration, international migration, self-employment, migrant selection, randomized experiment

JEL Classification: F22, J61, O15

Suggested Citation

giambra, Samuele and McKenzie, David John, Self-Employment and Migration. IZA Discussion Paper No. 12624, Available at SSRN: https://ssrn.com/abstract=3457668

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

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