Temporary and permanent migrant selection: Theory and evidence of ability‐search cost dynamics

Abstract

We integrate two workhorses of the labor literature, the Roy and search models, to illustrate the implications of migration duration-specifically, whether it is temporary or permanent-for patterns of selection. Consistent with our stylized model, we show that temporary migrants are intermediately selected on education, with weaker selection on cognitive ability. In contrast, permanent migration is associated with strong positive selection on both education and ability, as it involves finer employee-employer matching and offers greater returns to experience. Networks are also more valuable for permanent migration, where search costs are higher. Labor market frictions explain observed network-skill interactions. K E Y W O R D S migration, networks, Pakistan, self-selection J E L C L A S S I F I C A T I O N J61; O15

Temporary Migration Decisions and Effects on Household Income and Diets in Rural Bangladesh

“…This may be related to capabilities and resources needed for migration (De Haas, 2021), apart from the possibility of reverse causality. However, wealth is negatively associated with temporary migration, meaning that temporary migration is more commonly observed among the poor, as also found in the existing studies (Chen et al, 2019;Keshri & Bhagat, 2013). Finally, agriculture-dependent households, either through own farming or labor sales, are more likely to migrate temporarily during lean periods.…”

“…Longer-term migrason is not only longer but ouen also involving higher-paying jobs; hence the larger income effects are unsurprising. However, longer-term migrason is typically also more demanding than temporary migrason in terms of financial and emosonal costs and requirements (Coffey et al, 2014;Chen et al, 2019;Lagakos et al, 2023). We have shown that poorer households with family constraints are less likely to engage in longer-term migrason.…”

“…We expect that seasonality in income, wages, and job opportunities at the origin is an important factor for economic migration decisions, especially for temporary migration, as this type of migration is primarily responsive to earning prospects and changing opportunity costs at home (Coffey et al, 2014;Chen et al, 2019). Agrarian communities often experience pronounced lean periods between planting and harvesting crops, leading to temporary income and employment shortages for agriculture-dependent households (Khandker & Mahmud, 2012;Zug, 2006).…”

“…Existing studies on the determinants and effects of migration mostly focus on longer-term migration, which differs from temporary migration in many ways (Chen et al, 2019;Keshri & Bhagat, 2013;Shahriar et al, 2006). For example, while neoclassical theories of migration predict that the rural poor would migrate to urban areas with higher mean wages, in Bangladesh, majority of temporary migrants migrate to other rural areas to work in agriculture (Meghir et al, 2022), although mean wages in urban areas are almost twice as high as those in the countryside (Lagakos et al, 2023).…”

“…Several studies have analyzed determinants of temporary migration (Asefawu & Nedessa, 2022;Dodd et al, 2016;Keshri & Bhagat, 2013;Shahriar et al, 2006;Sucharita, 2020), and a few have also looked at effects (Bryan et al, 2014;de Brauw & Harigaya, 2007;Gibson & McKenzie, 2014;. However, these studies mainly compare temporary migration with non-migration, leaving a conceptual gap in understanding the choice of temporary migration as opposed to longer-term migration, which is also important to comprehend the behavior and effects of migration (Chen et al, 2019). Research suggests that -unlike longer-term migration -temporary migration typically cannot lift households out of poverty (Dash, 2023;Mishra, 2016).…”