Publication: How Important Is Selection? Experimental vs. Non-experimental Measures of the Income Gains from Migration
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Date
2010
ISSN
15424766
Published
2010
Author(s)
Stillman, Steven
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Abstract
How much do migrants stand to gain in income from moving across borders? Answering this question is complicated by non-random selection of migrants from the general population, which makes it hard to obtain an appropriate comparison group of non-migrants. New Zealand allows a quota of Tongans to immigrate each year with a random ballot used to choose among the excess number of applicants. A unique survey conducted by the authors allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the ballot, after allowing for the effect of non-compliance among some of those whose names were drawn. We also conducted a survey of individuals who did not apply for the ballot. Comparing this non-applicant group to the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods other than instrumental variables are found to overstate the gains from migration by 20-82%, with difference-in-differences and bias-adjusted matching estimators performing best among the alternatives to instrumental variables.
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Publication How Important is Selection? Experimental versus Non-Experimental Measures of the Income Gains from Migration(World Bank, Washington, DC, 2006-05)Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it difficult to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery to choose among the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. The authors also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group with the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. They find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well.Publication Migration and Mental Health: Evidence from a Natural Experiment(2009)People migrate to improve their well-being. Yet a large literature suggests that migration can be a stressful process, with potentially negative impacts on mental health. However, to truly understand the effect of migration one must compare the mental health of migrants to what their mental health would be had they stayed in their home country. The existing literature is not able to do this. New Zealand allows a quota of Tongans to immigrate each year with a random ballot used to choose amongst the excess number of applicants. Experimental estimates of the mental health effects of migration are obtained by comparing the mental health of migrants who were successful applicants in the random ballot to the mental health of those who applied to migrate under the quota, but whose names were not drawn. Migration is found to lead to improvements in mental health, particularly for women and those with poor mental health.Publication The Impacts of International Migration on Remaining Household Members : Omnibus Results from a Migration Lottery Program(2009-06-01)The impacts of international migration on development in the sending countries, and especially the effects on remaining household members, are increasingly studied. However, comparisons of households in developing countries with and without migrants are complicated by a double-selectivity problem: households self-select into migration, and among households involved in migration, some send a subset of members with the rest remaining while other households migrate en masse. The authors address these selectivity issues using the randomization provided by an immigration ballot under the Pacific Access Category of New Zealand s immigration policy. They survey applicants to the 2002-05 ballots in Tonga and compare outcomes for the remaining household members of emigrants with those for members of similar households that were unsuccessful in the ballots. The immigration laws determine which household members can accompany the principal migrant, providing an instrument to address the second selectivity issue. Using this natural experiment, the authors examine the myriad impacts that migration has on remaining household members, focussing on labor supply, income, durable assets, financial service usage, diet, and physical and mental health. The analysis uses multiple hypothesis testing procedures to examine which impacts are robust. The findings indicate that the overall impact on households left behind is largely negative. The findings also reveal evidence that both sources of selectivity matter, leading studies that fail to adequately address them to misrepresent the impact of migration.Publication Accounting for Selectivity and Duration-Dependent Heterogeneity When Estimating the Impact of Emigration on Incomes and Poverty in Sending Areas(2010-04-01)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.Publication The Long-Term Impacts of International Migration(World Bank, Washington, DC, 2015-11)This study examines the long-term impacts of international migration by comparing immigrants who had successful ballot entries in a migration lottery program, and first moved almost a decade ago, with people who had unsuccessful entries into those same ballots. The long-term gain in income is found to be similar in magnitude to the gain in the first year, despite migrants upgrading their education and changing their locations and occupations. This results in large, sustained benefits to the migrants’ immediate family, who have substantially higher consumption, durable asset ownership, savings, and dietary diversity. In contrast, the study finds no measureable impact on extended family.
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