Testing Classic Theories of Migration in the Lab
We use incentivized laboratory experiments to investigate how potential migrants make decisions about working in different destinations in order to test the predictions of different classic theories of migration. We test theories of income maximization, migrant skill-selection, and multidestination choice and how the predictions and behavior under these theories vary as we vary migration costs, liquidity constraints, risk, social benefits, and incomplete information.
First, we show how the basic income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, we find evidence of a home bias, where simply labelling a destination as “home” causes more people to choose that location. Third, we investigate whether the independence of irrelevant alternatives (IIA) assumption holds. We find it holds for most people when decisions just involve wages, costs, and liquidity constraints, but once we add a risk of unemployment and incomplete information, it no longer holds for about 20 percent of our sample.
This profile was current as of 2018, when she was part of the on-campus Kellogg community.
Catia Batista (PhD, University of Chicago), a 2017–18 Kellogg visiting fellow, is associate professor in economics at Portugal’s Universidade Nova de Lisboa, where she is cofounder and scientific director of the NOVAFRICA research center...