Working Paper: CEPR ID: DP16076
Authors: Christian Dustmann; Jrme Adda; Joseph Simon Goerlach
Abstract: This paper develops and estimates a dynamic model where individuals differ in ability and location preference to evaluate the mechanisms that affect the evolution of immigrants’ careers in conjunction with their re-migration plans. Our analysis highlights a novel form of selective return migration where those who plan to stay longer invest more into skill acquisition, with important implications for the assessment of immigrants’ career paths and the estimation of their earnings profiles. Our study also explains the willingness of immigrants to accept jobs at wages that seem unacceptable to natives. Finally, our model provides important insight for the design of migration policies, showing that policies which initially restrict residence or condition residence on achievement shape not only immigrants’ career profiles through their impact on human capital investment but also determine the selection of arrivals and leavers.
Keywords: international migration; human capital; expectations
JEL Codes: F22; J24; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| intention to remain (F22) | human capital investment (J24) |
| human capital investment (J24) | wage growth (J31) |
| persistent shocks to location preferences (R23) | human capital investment (J24) |
| migration duration expectations (J61) | wage acceptance (J31) |
| migration policies (F22) | human capital investment (J24) |
| migration policies (F22) | selection of arrivals and leavers (J63) |