Are Immigrants Positively or Negatively Selected? The Role of Immigrant Selection Criteria and Self-Selection

This paper specifies and estimates a structural model of international migration using micro data. This provides a direct test of human capital theory that suggests that individuals respond to the earnings differentials across countries while making their migration decisions. The paper specifies migration as a joint outcome of two decision makers, i.e. the individual who decides to apply for migration and the host country that reviews applications, and identifies the factors determining the decision of these two players. The empirical results provide evidence in support of the human capital model. It is also shown that both the host country and the individual have significant impacts on the resulting charatersitics of immigrants. The results suggest negative self-selection at the application stage both in terms of observed and unobserved characteristics and a positive selection at the review step by the host country. Although there is negative self- selection in terms of schooling among applicants, as a result of the positive selection at the review step the resulting migrants are positively selected. However, in terms of unobservable characteristics the review step is unable to reverse the negative self-selection that occurs at the application stage, and the resulting migrants are negatively selected in this dimension.