1 Department of Economics, Aarhus School of Business, Aarhus BSS, Aarhus University2 GlobID -Globalization and Industry Dynamics, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 IAB5 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
Two puzzling facts of international migration are that only a small share of a sending country's population emigrates and that net migration rates tend to cease over time. This paper addresses these issues in a migration model with heterogeneous agents that features temporary migration. In equilibrium a positive relation exists between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, empirical migration models, estimating net migration flows instead of stocks, may be misspecified. This suspicion appears to be confirmed by our empirical investigation of cointegration relationships of flow and stock migration models.
International migration; Panel cointegration; Temporary migration
Main Research Area:
EEA/ESEM European Economic Association Annual Meeting, 2006