How Important is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration

By David J. McKenzie, John Gibson, S. Stillman. Social Science Research Network, 2006

577 citations recorded by the source corpus.

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.

Subfields: Gender Studies, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/2f2d314633556969d268d89e27d9de968e9e08a3

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Citations in the corpus

Miserable Migrants? Natural Experiment Evidence on International Migration and Objective and Subjective Well-Being (2012, methodology): “Since this sort of exercise has already been conducted for objective well-being outcomes with the PINZMS data (McKenzie et al., 2010), we concentrate here on the subjective well-being indicators.”
The Impacts of International Migration on Remaining Household Members: Omnibus Results from a Migration Lottery Program (2009, methodology): “Other research with PINZMS data shows that those who move to New Zealand experience large gains in income (McKenzie et al., 2009) and improvements in mental health (Stillman et al.”
Three conditions under which experiments and observational studies produce comparable causal estimates: New findings from within‐study comparisons (2008, methodology): “McKenzie, Gibson, and Stillman (2007) took advantage of a lottery that allowed winners to emigrate from Tonga to New Zealand.”
International Migration and the Developing World (2010, background): “McKenzie, Gibson, and Stillman (2006) examine this issue using data on Tonga, in which individuals may apply to a lottery to obtain a visa to move to New Zealand.”
Do Electoral Quotas Work after They Are Withdrawn? Evidence from a Natural Experiment in India (2009, unknown): “…recent works by economists that have examined the effects of such lotteries—–often employed by governments to ensure apolitical selection of beneficiaries, rather than to facilitate policy evaluation—–on various outcomes (Clingingsmith, Khwaja, and Kremer 2009; McKenzie, Gibson, and Stillman 2006).”