Accounting for Selectivity and Duration-Dependent Heterogeneity When Estimating the Impact of Emigration on Incomes and Poverty in Sending Areas
The impacts of international emigration and remittances on incomes and poverty in sending areas are increasingly studied with household survey data. But comparing households with and without emigrants is complicated by a triple-selectivity problem:...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100413101850 http://hdl.handle.net/10986/3755 |
| Summary: | The impacts of international emigration
and remittances on incomes and poverty in sending areas are
increasingly studied with household survey data. But
comparing households with and without emigrants is
complicated by a triple-selectivity problem: first,
households self-select into emigration; second, in some
emigrant households everyone moves while others leave
members behind; and third, some emigrants choose to return
to the origin country. Allowing for duration-dependent
heterogeneity introduces a fourth form of selectivity -- one
must now worry not just about whether households migrate,
but also when they do so. This paper clearly sets out these
selectivity issues and their implications for existing
migration studies, and then addresses them by using survey
data designed specifically to take advantage of a randomized
lottery that determines which applicants to the
over-subscribed Samoan Quota may immigrate to New Zealand.
The analysis compares incomes and poverty rates among left
behind members in households in Samoa that sent Samoan Quota
emigrants with those for members of similar households that
were unsuccessful in the lottery. Policy rules control who
can accompany the principal migrant, providing an instrument
to address the second selectivity problem, while differences
among migrants in which year their ballot was selected allow
for estimation of duration effects. The authors find that
migration reduced poverty among former household members,
but they also find suggestive evidence that this effect may
be short-lived as both remittances and agricultural income
are negatively related to the duration that the migrant has
been abroad. |
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