Individual Preferences and Self-Selection into Emigration in Developing Countries

Individuals decide whether or not to migrate by comparing the perceived costs and benefits. Individual characteristics such as age, education, social bonds, time preferences, or risk attitudes can be expected to affect the actual costs and benefits, as well as how they are perceived. Thus, self-selection into migration depends on individuals’ preferences. Despite the centrality of self-selection to the migration literature and the emerging evidence of the importance of preferences for development, a lack of data has caused that the role of individual preferences in shaping migration decisions has thus far been almost completely unstudied.

We provide the first systematic analysis of how several individual preferences shape migration decisions. Using individual-level data from 47 low and middle-income countries from the Gallup World Poll and the Global Preference Survey, we find that in addition to risk attitudes also patience and negative reciprocity are important determinants of migration decisions. Moreover, a more positive view of the local conditions induces people to stay. Better economic outlooks particularly affect those who are impatient. Creating economic opportunities and improving governance can thus not only be effective in reducing the total number of people who leave but also affects the mix of emigrants. This can have important implications for development by determining the distribution of preferences among those who remain.

Claas Schneiderheinze (IfW) Tobias Stöhr (IfW, DIW, IZA)

Speaker:

Dr. Tobias Stöhr is senior researcher at the Kiel Institute for the World Economy (IfW)