Workinprogresses

Determinants of Migration Choices: The Role of Beliefs about Pecuniary and Nonpecuniary Outcomes

Why do young adults migrate? This paper studies the reasons behind migration choices of young, highly educated individuals from lagging-behind regions. I collect a rich dataset on subjective expectations at the time when respondents are making their choice of whether to migrate out of Andalusia, one of the poorest regions of Spain. I then use the data to estimate a life-cycle model of migration choice, taking migration duration into account. Crucially, the collected data allow me to separate preferences from beliefs and to distinguish between pecuniary and nonpecuniary factors. Regarding pecuniary factors, I find that migration decisions are more sensitive to earnings, followed by the prospects of full-time employment and a better match between studies and job. Although there is sorting on expected labor market outcomes, my results show that the set of nonpecuniary factors, such as being close to family and quality of social life, play a larger role in choosing whether to migrate. Given the large expected likelihood of short-term migration, I study the reasons for planning to migrate temporarily. Counterfactual exercises show that a human capital acquisition strategy plays a small role on the plan to migrate short-term. Instead, expected short-term migration is largely motivated by preferences for nonpecuniary outcomes.Presented at: SAEe (Valencia, December 2022), SOLE (Philadelphia, May 2023), BSE Summer Forum (Barcelona, June 2023), Workshop on Subjective Expectations (Bocconi-Milan, June 2023), Workshop on Migration and Family Economics (IESEG-Paris, June 2023), EEA-ESEM (Barcelona, August 2023), EALE (Prague, September 2023)

Selection into Internal and International Migration of Young Individuals: Evidence using Novel Survey Data

This paper studies the self-selection intentions into internal and international migration of young individuals in their school-to-work transition from the South of Spain -one of the areas with highest youth unemployment rates in the EU. I use a rich dataset that includes personal, academic and family background characteristics, as well as individuals’ beliefs about labor market outcomes in their home region and migration destination. Results indicate that having a higher GPA and being from a high socioeconomic status predict individuals’ intention to migrate internationally, but not internally. Despite being positively selected, students who plan to migrate internationally have the most pessimistic views about their career prospects in their home region. With their migration plans, they expect higher labor market returns to migration than internal migrants. International migrants are more likely than internal migrants to plan a long-term migration as opposed to a temporary migration. My results suggest a future brain drain from the region as well as from the country.