Do Bangladeshi migrants favourably self-select and sort across destinations?

Purpose – The purpose of this paper is to investigate whether migrants from Bangladesh choose the destination that offers them the highest earnings and whether the relative stock of the skilled migrants in a destination increases with the earnings differences between the skilled and the unskilled. Design/methodology/approach – Using a nationally representative sample of both stayers and migrants from Bangladesh to all destinations and correcting for self-selection bias in earnings using a semi-parametric method developed by Dahl (2002), the author tests whether selection and sorting of Bangladeshi migrants depend on cross-country differences in the rewards to skills as suggested by the Roy (1951) model of comparative advantage. Findings – Migrants from Bangladesh not only choose the destinations that offer the highest earnings but also the destination that offers the highest earnings relative to the skill level of the migrants. Research limitations/implications – Due to the unavailability of data on recruiting agencies, we cannot investigate the role played by recruiting agencies in the migrant’s decision. Social implications – Policy-makers in both the sending and destination countries need to know how migrants choose their destinations in order to formulate effective and welfare-enhancing migration policies. Originality/value – This paper is the first to study how skill composition and earnings shape migration from Bangladesh using micro-level data. It is also the first to study sorting behavior of migrants from any South Asian countries.