Title: Interaction Between Economic and Political Factors In the Migration Decision
Reference Number: 1028
Publication Date: September 2001
JEL Classifcation: J31, J61, O15
Author(s):

Kit-Chun Lam
Hong Kong Baptist University

Abstract:

While the traditional human capital model regards differential lifetime net earnings as the key motivation for emigration, in reality migrants often earn substantially less in the receiving country when they leave a country facing possible changes in political and economic systems. In this paper we incorporate the interaction of economic and political factors in the emigration decision. Empirically we allow economic and political confidence to interact in a discrete choice model of migration decision and test it with the data of Hong Kong when she was facing a transition to a new regime of "one country and two systems". Our results show that the lack of political confidence increases emigration propensity significantly. Lack of economic confidence also increases emigration propensity though by a lesser extent, whereas expected decrease in income abroad deters emigration by only a small magnitude. Our analysis is pertinent to migration from countries facing political uncertainties such as the LDCs, Asian and former Soviet bloc countries.

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Published in Journal of Comparative Economics 30 (September 2002), pp. 448-504.

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Last modified: 01/23/2007