Rationality of Migration

The paradigm of a rational individual acting on the earnings-enhancing benefits of migration is subjected to statistical scrutiny, using data from Turkey. Results with robust selectivity correction support the rationality hypothesis: Both migrants and nonmigrants chose the option in which they had c...

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Bibliographic Details
Published in:International economic review (Philadelphia) 2000-11, Vol.41 (4), p.893-920
Main Author: Tunali, Insan
Format: Article
Language:English
Subjects:
Agriculture
Animal migration behavior
Descriptive statistics
Earnings
Econometrics
Economic models
Economic theory
Estimation methods
Human capital
Hypotheses
Labor markets
Mathematical methods
Migration
Parametric models
Pay-off
Probability
Rational expectations
Rationality
Rural schools
Self employment
Studies
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Summary:The paradigm of a rational individual acting on the earnings-enhancing benefits of migration is subjected to statistical scrutiny, using data from Turkey. Results with robust selectivity correction support the rationality hypothesis: Both migrants and nonmigrants chose the option in which they had comparative advantage. However, the estimated gain from moving is negative for a substantial portion of migrants, whereas a minority realize very high returns. This suggests that migration is a lottery: Individuals are willing to invest in a proposition that has a high probability of yielding negative returns because of the potential for a very large payoff.
ISSN:0020-6598
1468-2354
DOI:10.1111/1468-2354.00089